By Emmanuel Thomas I Saturday, July 04. 2026
LAGOS — Dangote Petroleum Refinery and Petrochemicals has clarified the mechanisms driving its pricing strategy, promising that Nigerian consumers will continue to benefit from lower production costs as cheaper crude inventories enter its refining system.
In a statement addressed to the public, the management of the 650,000 barrel-per-day refinery addressed growing questions regarding why domestic pump prices do not immediately fluctuate in tandem with daily shifts in international crude oil benchmarks.
The company explained that the lag in price adjustment is rooted in standard global refining economics, where current output is tied to historical procurement costs.
”A refinery does not produce today’s petrol from today’s crude oil price,” the company stated. “The fuel sold today was produced from crude oil purchased weeks or even months earlier under commercial supply contracts. As those inventories are processed, the cost of production gradually changes.”
Despite the lag in processing high-cost crude acquired in previous months, the refinery noted it has already instituted substantial cuts to its ex-depot prices for Premium Motor Spirit (PMS), automotive gas oil (diesel), and aviation turbine kerosene (Jet A1).
According to the statement, the Dangote Refinery chose to absorb a significant portion of recent international crude price spikes rather than pass the full inflationary burden onto Nigerian consumers.
The refinery’s management framed the intervention as part of a broader macroeconomic cushion.
To provide context on global energy pricing, the company pointed out that petrol prices in importing European nations frequently range between ₦3,000 and ₦4,000 per litre. While acknowledging the strict income disparities in Nigeria, the refiner argued that local production plays a vital role in moderating what would otherwise be prohibitive market costs.
Beyond the immediate retail metrics, Dangote Refinery re-emphasized the structural advantages of local refining over the country’s decades-long reliance on imported petroleum products.
By substituting imported supply chains with domestic refining, the company highlighted its role in:
Conserving foreign exchange reserves by reducing dollar-denominated import bills.
Insulating the domestic market from international supply chain disruptions.
Enhancing national energy security through guaranteed local availability.
Looking ahead, the refiner expressed optimism for the domestic market, provided global indicators hold steady.
”As lower-cost crude purchased in recent months continues to enter our refining process, Nigerians should continue to benefit from lower production costs, provided international market conditions remain stable,” the statement concluded, reiterating that its long-term corporate benchmark rests on driving domestic industrial stability and job creation rather than maximizing short-term margins.