Business

Middle East War: Dangote Refinery Cushions Global Oil Costs By 20% For Nigerian Market

The Dangote Refinery will ensure that Nigeria is insulated from these supply shocks by prioritising supply to the domestic market. This is one of the many benefits of domestic refining.

Published

5 months ago

March 5, 2026

OCHEFA

319 Views

Dangote Refinery on Thursday said that it has absorbed 20 percent of the cost escalation of global oil price, for now, to cushion the domestic market.

In a statement on its official X , the company reassures Nigerians of its unwavering commitment to serving as a stabilising force amid recent shocks in the international oil market.

The conflict in the Middle East has led to the shutdown of some refineries and cut in refinery production across the world. This is leading to a global scarcity of petroleum products.

China has banned export of gasoline and diesel.

The Dangote Refinery will ensure that Nigeria is insulated from these supply shocks by prioritising supply to the domestic market. This is one of the many benefits of domestic refining.

The conflict has driven global crude and freight prices sharply higher, with benchmark Brent prices rising by about 26% within a short period to above $84.0 per barrel.

In response, the refinery implemented a measured adjustment of N100 per litre in its ex-depot price of Premium Motor Spirit, representing an increase of about 12%.

The refinery has absorbed 20% of the cost escalation, for now, to cushion the domestic market.

This is despite continuing to source crude at prevailing international market prices, whether purchased locally or from foreign suppliers.

It is worth noting that Nigerian crude oil is more expensive than the Brent benchmark price by $3 to $6 per barrel. After adding freight of $3.50 per barrel, crude oil will be landing in our tanks between $88 and $91 per barrel.

For context, crude oil was landing our tanks at about $68 per barrel when our ex-depot price was N774/litre.

Furthermore, while we receive about five cargoes a month from NNPC which we pay for in Naira, these cargoes are priced at international market prices + Premium and fall short of the 13 cargoes which we require to support sales into Nigeria.

We therefore, end up procuring foreign exchange at open market rates to pay for crude cargoes purchased from local and international traders.

The high crude cost is compounded by the fact that Nigeria upstream producers have failed to supply crude oil to the refinery as required under the PIA, forcing us to source a substantial portion through international traders who charge an additional premium.

As a private enterprise operating in a deregulated environment, Dangote Petroleum Refinery has remained responsive and has made significant sacrifices by aligning pricing with market realities to ensure sustainability, particularly as it sources all its crude at prevailing international market prices, whether locally or from foreign suppliers.

Selling below cost would undermine its ability to procure crude, sustain production and guarantee uninterrupted supply to Nigerians.

Despite these pressures, local refining at this scale continues to reduce exposure to international supply disruptions, moderate foreign exchange demand and protect the country from severe shortages during periods of global instability.

The refinery is also accelerating deployment of Compressed Natural Gas-powered trucks to cushion the impact of global shocks, enhance nationwide distribution efficiency, reduce logistics costs and improve delivery timelines across the downstream sector.

The rollout is scheduled to commence this month.

We remain committed to transparency, operational excellence and the long-term objective of securing sustainable energy security and stability for Nigeria at an affordable cost.

Related Topics:Dangote Refinery Middle East War Featured

Up Next

Police Burst Factories in Anambra for Destroying Returnable Packaging Materials

Don't Miss

BPP Saves FG N1.1trn Public Sector Procurements

Click to comment

Business

Cardoso Urges Banks To Lend Out Idle Funds With CBN * Retains MPR at 26.5%

Cardoso made the call on Tuesday after the 306th Monetary Policy Committee (MPC) meeting held in Abuja from July 20 to July 21.

Published

6 hours ago

July 21, 2026

OCHEFA

18 Views

The Central Bank of Nigeria (CBN) Governor, Olayemi Cardoso , urged banks from keeping idle funds with the apex bank and encouraging increased lending into the economy.

Cardoso made the call on Tuesday after the 306th Monetary Policy Committee (MPC) meeting held in Abuja from July 20 to July 21.

The apex bank retained the Monetary Policy Rate (MPR), also known as benchmark interest rate, at 26. 5 percent.

This decision marks the second consecutive retention of the MPR at 26.5 per cent, following a 50-basis-point reduction in February from 27 per cent.

“The committee’s decision to maintain the current policy stand follows a thorough assessment of the balance of risk,” said Cardoso.

He emphasised that although headline inflation moderated marginally in June 2026, global uncertainties have heightened due mainly to the renewed hostilities in the Middle East.

The MPC also adjusted the asymmetric facilities corridor around the MPR to +50/-450 basis points—a move aimed at discouraging banks from keeping idle fund with CBN.

Furthermore, the committee maintained the Cash Reserve Ratio (CRR) for commercial banks at 45 per cent, retained the rate for merchant banks at 16 per cent, and kept the CRR on non-TSA public-sector deposits at 75 per cent for liquidity management considerations.

Cardoso said despite the global uncertainties, the Nigerian economy has “remained largely resilient to the external shocks”.

Business

CBN admits it opened domiciliary accounts for PFIPC agency

Represented by the Director of its Banking Services Department, Hamisu Ibrahim, the CBN said that the accounts are one in US dollars, the other in British pounds sterling, were opened following a mandate received from the Office of the Accountant-General of the Federation.

Published

15 hours ago

July 21, 2026

OCHEFA

20 Views

File photo : PFIPC agency DG, Adeniyi Adeyemi

The Central Bank of Nigeria had admitted that it opened two foreign-currency domiciliary accounts for the controversial Presidential Foreign Investment Promotion Council (PFIPC).

The apex bank made the confirmation, yesterday, during the public hearing convened at the National Assembly Complex by the House of Representatives Ad-hoc Committee investigating the existence and operations of the PFIPC, chaired by Yusuf Gagdi and inaugurated by Speaker Tajudeen Abbas.

He explained that on July 30, 2025, CBN received a mandate dated July 29, 2025 from the Office of the Accountant-General.

“We received the mandate to authorise two accounts, one a US dollar domiciliary account, the other a pound domiciliary account, for the Presidential Economic Advisory Council/Presidential Foreign Investment Promotion Council,” Ibrahim told the committee.

He explained the CBN’s verification process, “The process of opening an account requires a mandate from the Office of the Accountant-General of the Federation.

“Once we receive that mandate, we perform all the necessary verifications to confirm that this mandate is actually coming from that office.

The department that handles the mandate is different from the department that actually does the account opening,” he said.

Nevertheless, he noted that no one came to activate the accounts after they were opened.“We did not receive any correspondence, mandate, signature or mandate cards. We were not introduced to the authorising or approving officers.“Based on that, those accounts remain inactive, with zero balance. There have been no foreign exchange allocations.