Dangote Petroleum Refinery has announced a further increase in the gantry price of Premium Motor Spirit (PMS) to N1,175 per litre. This latest revision, communicated to marketers on Monday, represents an N180 or about 18.1 per cent jump from the previous N995 per litre announced on Friday, marking the third upward adjustment within a week and the fourth in less than two weeks. The refinery attributed the price hike to production costs and market volatility.

The development follows a temporary suspension of petrol loading operations and restricted truck-out activities at the refinery, which had fuelled speculation among market participants regarding an imminent price adjustment. The consistent upward revision underscores the mounting pressure in Nigeria’s downstream petroleum market, exacerbated by global oil price volatility. Experts predict that motorists will likely purchase petrol from fuel stations at rates exceeding N1,200 per litre, adding to the economic strain on consumers.

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has issued a stark warning that the pump price of PMS could reach N2,000 per litre if the current geopolitical tensions, particularly in the Middle East, continue to escalate. The association has urged the Group Chief Executive Officer of NNPC Ltd., Bayo Ojulari, to expedite the commencement of production at Nigeria’s other local refineries, including the Area 5 Plant at the Port Harcourt Refinery and the Warri Refinery.

The price surge is not limited to petrol. Automotive Gas Oil (AGO), commonly known as diesel, has also experienced significant price increases, rising above N1,400 per litre from its previous price of N950 per litre. Industry projections suggest that if the current trend persists, PMS prices could approach N2,000 per litre, while AGO could reach as high as N3,000 per litre.

Despite these price adjustments, the Chief Executive Officer of the Dangote Petroleum Refinery & Petrochemicals (DPRP), David Bird, emphasized the refinery's readiness to compete in Nigeria’s petroleum market under import-parity pricing, provided regulators ensure fair competition. Bird clarified during a media briefing in Lagos that the refinery purchases Nigerian crude at international benchmark prices and does not benefit from any discounted rates under the Federal Government’s crude-for-naira arrangement. He highlighted that the refinery’s operations are fully exposed to international commodity market factors, including crude oil prices, freight rates, insurance, and financing costs. The surge in tanker freight costs, from approximately $800,000 to about $3.5 million per shipment, exemplifies these challenges.

Bird reiterated the refinery’s commitment to meeting domestic fuel demand amidst global market volatility, stating, “We will prioritise domestic supply and continue to ensure that Nigeria enjoys what it has enjoyed only for the last 18 months, two years, and that is fuel abundance and not fuel scarcity.” The refinery, which operates at a capacity of 650,000 barrels per day, is considered a transformative project for Nigeria’s energy sector, aiming to provide energy security by meeting the country’s fuel demand independently of international supply shocks.