Dangote Petroleum Refinery and Petrochemicals has said the pricing of its petroleum products is not directly linked to daily movements in international crude oil prices, explaining why pump prices do not immediately reflect declines in global oil benchmarks.
This clarification was contained in an official statement issued by the refinery following calls from Nigerians and the Federal Government for marketers to significantly reduce petroleum product prices amid the recent drop in international crude oil prices.
The refinery reiterated its commitment to ensuring Nigerians benefit from favourable market developments through fair, responsible and sustainable pricing while noting that crude oil is typically procured weeks or months before processing under commercial contracts linked mainly to monthly average pricing mechanisms.
What they are saying
Dangote Refinery said it has continued to reduce the prices of its petroleum products despite processing crude oil purchased when international prices were significantly higher than current levels.
- “Since May 30, 2026, Dangote Petroleum Refinery has reduced the ex-depot price of Premium Motor Spirit (PMS) by N200 per litre, Automotive Gas Oil (AGO) by N300 per litre and Jet A1 aviation fuel by N520 per litre, despite continuing to process crude oil acquired during a period when international crude prices were significantly higher than current levels.”
- “These reductions demonstrate our commitment to passing on cost efficiencies to consumers while maintaining the operational and financial sustainability of domestic refining.”
- “It is important to clarify that refinery pricing does not move in tandem with daily international crude oil quotations.”
- “Crude oil is procured weeks, and in some cases months, before it is processed, under commercial contracts linked primarily to monthly average pricing mechanisms rather than prevailing spot market prices.”
The refinery added that the petroleum products currently being supplied from its facilities are still being produced from crude inventories acquired at substantially higher costs than prevailing international market prices.
More insight
Dangote Refinery disclosed that the average landed cost of crude processed at its facilities was about US$124.80 per barrel in May and US$95.25 per barrel in June, compared with the current international benchmark of around US$71.01 per barrel.
- The refinery explained that its crude is purchased on a Dated Brent plus market premium, freight and logistics cost basis rather than the headline ICE Brent price commonly reported in the media.
- It said it absorbed a substantial portion of higher crude costs instead of immediately transferring the increase to consumers, helping to support market stability and moderate inflationary pressures.
According to the refinery, Nigeria’s petroleum product prices remain lower than those in neighbouring countries, even after accounting for taxes.
- It also revealed that the latest N50 per litre reduction represents the fourth petrol price cut within one month, bringing cumulative PMS price reductions to more than N200 per litre since May 30, 2026.
- The refinery said Nigerians can expect further price moderation as lower-cost crude inventories gradually replace higher-priced stock, provided international market conditions remain favourable.
It stated that the refinery currently supplies volumes sufficient to meet national demand, helping to strengthen energy security, eliminate dependence on imports, conserve foreign exchange and provide greater price stability for consumers and businesses.
As procurement costs continue to decline and lower-priced inventories replace higher-cost crude stocks, Nigerians can expect further price moderation, provided international market conditions remain favourable.
What you should know
Nairametrics had earlier reported that Dangote Petroleum Refinery and Petrochemicals reduced the ex-depot price of petrol by N50 to N1,075 per litre, marking its fourth price reduction within one month.
- The latest adjustment, announced on Thursday, July 2, 2026, increased the refinery’s cumulative reduction in ex-depot petrol prices to N200 per litre since May 30, 2026.
- The company said it continues to pass lower production costs to consumers despite refining crude oil purchased at significantly higher international prices.
Dangote Refinery maintained that the latest price adjustment reflects its commitment to transferring the benefits of improving market conditions to consumers while ensuring the long-term sustainability of its operations.
The refinery said it remains committed to supplying high-quality petroleum products at competitive prices while strengthening Nigeria’s energy security, supporting economic growth and building a stable and efficient downstream petroleum industry.
