Dangote Defends Petrol Price Hikes as Pump Prices Near N1,400 Amid Crude Cost Controversy

Refinery explains time lag between crude purchase and finished product pricing as marketers warn of business uncertainty

The Dangote Petroleum Refinery has strongly defended its recent series of petrol price increases, attributing the upward adjustments to the high cost of crude oil purchased weeks and months earlier, as well as the lengthy and complex process involved in securing, shipping and delivering crude to the refinery. The explanation comes as the price of Premium Motor Spirit (PMS) — commonly known as petrol — continues to climb across Nigeria, with the product now selling between N1,310 and N1,400 per litre, depending on the location and distance from supply depots.

In Lagos and Ogun states, petrol is currently retailing at about N1,310 per litre, while consumers in northern states and other regions farther from the coastal refinery are paying N1,350 or more. In some remote locations, the price is approaching N1,400 per litre, reflecting the high cost of transportation and logistics involved in distributing the product across the country’s vast geography.

The latest round of increases followed the refinery’s decision to raise its gantry price — the price at which marketers purchase the product directly from the refinery — by N65 per litre, from N1,200 to N1,265, effective August 29, 2026. This marked the third price hike announced by the refinery in just eight days, bringing the total adjustment to N100 per litre since August 21, representing an increase of approximately 8.6 per cent. The refinery first increased its gantry price from N1,165 to N1,185 per litre on August 21. Five days later, it raised the price by another N15 to N1,200 per litre, effective August 26. On Saturday, August 29, it announced the latest N65 increase, taking the price to N1,265 per litre. The cumulative effect has pushed the refinery’s coastal PMS price from N1,582,380 to N1,669,545 per metric tonne.

Critics have been quick to point out that these price hikes occurred even as global crude prices were experiencing a decline. Brent crude closed at $88 per barrel on Friday, representing a 5 per cent drop from earlier levels, despite ongoing geopolitical tensions between Iran and the United States. However, a senior executive of the Dangote refinery, who spoke with The PUNCH on condition of anonymity because he was not authorised to speak publicly on the matter, explained that the prevailing international crude price could not be used as the sole basis for determining the cost of petrol being produced from crude already purchased by the refinery.

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The executive outlined the extensive timeline involved in crude procurement, asking a series of rhetorical questions to illustrate the point: “If you want to buy crude at today’s price, when do you think you will complete the actual transaction to purchase the crude? When will you get a laycan? When can you get a ship chartered and a charter party agreement signed? When will the ship go to load the crude and secure the laycan for discharge? When is the sailing time before the crude eventually gets into your tank?” He further questioned how the refinery would account for large volumes of crude purchased earlier when prices were higher, adding, “And what will happen to the huge quantities of expensive crude that you bought long ago and stored in the tanks? These are the factors determining the change in prices, not an immediate crude price change.”

The refinery’s position is supported by data revealing the scale of its crude procurement operations. The company recently disclosed that it spent $4.48 billion importing crude** over a two-month period, with **40.40 million barrels of crude** imported between May and June 2026. The refinery explained that crude purchases are typically made weeks or months in advance under contracts linked to **monthly average prices** rather than spot market rates. According to records, the refinery imported 21.47 million barrels of crude in May at a landed cost of $2.68 billion, before bringing in another 18.93 million barrels worth $1.80 billion in June. The average landed cost of crude fell from **$124.80 per barrel in May to $95.25 per barrel in June, reflecting softer global crude prices, lower freight costs and changes in the mix of crude grades purchased. Despite this decline, the refinery noted that both monthly averages remained well above the current international benchmark, meaning much of the fuel currently being supplied was produced from more expensive crude inventories.

Energy experts have weighed in on the pricing debate, backing Dangote’s position. Energy analyst Dan Kunle argued that fluctuations in global crude oil prices, inventory costs and market realities make it impossible for petrol prices to fall immediately whenever international oil prices decline. He explained, “The crude cargoes delivered in May and June were ordered and paid for as far back as February and March. In international crude marketing, you cannot take delivery immediately. It takes about one to one-and-a-half months before the cargo arrives, meaning you have inventory on the high seas, inventory in storage and inventory feeding into the refinery.” Kunle added that several operational expenses significantly increase refining costs, with freight, handling charges, demurrage and delays at Nigerian export terminals all contributing to the final price.

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The issue is particularly significant for Dangote because the refinery does not rely entirely on Nigerian crude. Reports indicate that between 30 and 40 per cent of the refinery’s crude feedstock is being imported. According to the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) , oil producers in Nigeria supplied about 80 per cent of the crude oil processed by domestic refineries, while refiners imported about 20 per cent between January and July this year. The refinery sources crude from across Africa and beyond, purchasing Nigerian grades such as Bonny Light, Qua Iboe, Escravos, Forcados, Amenam and Agbami alongside international blends including Libya’s El Sharara, Angola’s Cabinda and other regional grades. The refinery also recently imported crude from the United Arab Emirates for the first time, highlighting its growing flexibility in securing feedstock as global supply patterns evolve.

The refinery has also stated that it deliberately absorbed part of the higher crude procurement costs instead of passing them entirely to consumers, arguing that doing so helped cushion inflationary pressures and improve price stability in Nigeria’s downstream market. It also said domestic refining has strengthened Nigeria’s energy security by reducing dependence on imported petroleum products and easing pressure on the country’s foreign exchange reserves. Looking ahead, the company said consumers could benefit from further reductions in fuel prices as cheaper crude purchased in recent weeks gradually replaces higher-cost inventories, provided global oil market conditions remain supportive.

The latest price hikes have, however, heightened concerns among petroleum marketers, who have warned that the volatility is making it difficult to plan their businesses. The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN) , Chinedu Ukadike, said marketers were dealing with several factors that could push up the cost of petrol. “We are facing the challenges of the volatility in the market. There are policies of the government, policies of the international market, and exchange rates. These are inherent dispositions to the increase in pump prices. We are not refiners to be able to determine the price of petroleum products.” He, however, acknowledged that Dangote had previously reduced its petrol price in response to movements in the international market. “But, I also believe that Dangote has been consistent in terms of reducing its price in line with the international market rate. With this situation now, we cannot, at this particular point in time, structure our business. It’s going to be too difficult for us to structure our business.”

Ukadike also warned that continued tensions between Iran and the United States could worsen price irregularities. “The more the Iran and United States crisis continues to persist, the more we’ll be having these irregularities in price,” he added. The IPMAN official said the price fluctuations were already being reflected in the cost of petrol across the country. “Also, bear in mind that the price of crude oil is determined by the international market. So, for all the independent marketers, we will continue to strive. Prices have been fluctuating, and we are still loading. The price of petrol will continue to be volatile as long as the price of crude is not stable and other factors relating to the financial situation.”

The impact of the latest adjustment is already being felt in the retail market, with petrol now selling at about N1,310 per litre in Lagos and Ogun and N1,350 or more in parts of the North and other distant markets. In some locations, the product is approaching N1,400 per litre. The difference in pump prices across locations is partly linked to the cost of moving petrol from the coastal refinery and depots to distant markets, with transportation and other distribution expenses adding to the cost of the product. This is one of the reasons the Dangote refinery plans to extend its free distribution scheme across the country. IPMAN has welcomed Dangote’s decision to deliver petroleum products free to states such as Imo and Anambra, but urged the company to extend the programme to northern states to achieve uniform pump prices and ease widespread operational strain.

Data contained in the Major Energies Marketers Association of Nigeria’s Energy Bulletin for August 27 showed Dangote Refinery’s PMS gantry price at N1,200 per litre on August 27, with the estimated spot import-parity price of petrol into tanks standing at N1,222.32 per litre, meaning Dangote’s N1,200 gantry price was N22.32 below the spot import-parity estimate. However, two days later, the refinery raised its gantry price to N1,265 per litre, putting the new price N42.68 above the August 27 spot import-parity estimate. The crude market has remained volatile amid geopolitical tensions involving Iran and the United States and uncertainty over crude flows through the Strait of Hormuz.

The latest development comes amid renewed volatility in the global oil market, with the ongoing United States-Iran conflict adding to uncertainty in the international energy market. This is also coming at a time when the presidential candidate of the African Democratic Congress, former Vice President Atiku Abubakar, said he would reintroduce fuel subsidies to reduce hardship and the cost of living. Ukadike said marketers and consumers were ultimately bearing the consequences of the price movements, and the frequent changes in the cost of petrol were creating uncertainty for marketers and consumers, as the cost of replacing products could change substantially within a short period.

Dangote Defends Petrol Price Hikes as Pump Prices Near N1,400 Amid Crude Cost Controversy

Fuel subsidy removal: Falana demands accountability over N15.8tr resources, warns against ‘scam’ era

Human rights lawyer and Senior Advocate of Nigeria (SAN), Femi Falana, has challenged the Federal Government, state governments and local authorities to account for the additional resources generated since the removal of petrol subsidy, warning that Nigerians must not be taken back to what he described as the era of the fuel subsidy scam.

Falana said Nigerians were entitled to know how the additional funds now available to the three tiers of government were being spent, particularly as households continue to face high food prices, transportation costs and other pressures associated with the cost-of-living crisis.

The senior lawyer made the remarks during an appearance on Channels Television’s Sunday Politics, where he questioned whether ordinary Nigerians were receiving adequate benefits from the increased revenue available to governments following the fuel subsidy removal.

According to Falana, it was no longer sufficient for governments to tell citizens to be patient while they wait for the benefits of economic reforms. He argued that the impact of increased government revenue should be visible in basic infrastructure and public services.

He cited the condition of a road in Ekiti State leading to Afe Babalola University as an example of what he described as a failure of public accountability.

Falana said the affected local government reportedly received about N5.4 billion between January and May 2026, yet a road reportedly requiring less than N500 million for rehabilitation remained in poor condition.

“So you can’t fix a road with less than 500 million naira? And in any case, state governments were fixing roads, and they would then go to Abuja to ask for a refund,” Falana said.

He argued that the situation raised broader questions about the management of public funds, particularly because states and local governments have received significantly higher allocations since the subsidy was removed.

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Falana said accountability should not be limited to the Federal Government, stressing that citizens must also demand explanations from state and local government officials over the use of increased allocations.

“If you say we are making more money, we don’t want to go back to the era of the fuel subsidy scam. Where are the benefits?” he asked.

The lawyer also rejected repeated calls for Nigerians to simply wait for the benefits of the reforms, saying the economic hardship confronting citizens requires urgent action.

“It’s a fallacy being told to wait and wait and wait. People are dying,” he said.

Falana further argued that Nigeria should have gained significant fiscal space from ending government-funded petrol subsidies, particularly because the country was still generating revenue from crude oil.

He estimated that about $10 billion previously earmarked annually for fuel importation ought to have been saved following the end of the subsidy regime.

However, he said a substantial portion of government resources was being consumed by debt servicing, which he identified as one of the major challenges limiting the impact of increased revenues.

“Now, the money earmarked for fuel importation by the government—$10 billion per annum—ought to have been saved, but the bulk of this money goes for servicing of debt. That’s where the problem lies,” Falana said.

His comments come amid a renewed debate over what has happened to the resources freed by the petrol subsidy removal announced by President Bola Tinubu shortly after he assumed office in May 2023.

The Federal Government has disclosed that the removal of the subsidy helped mobilise about N15.8 trillion in resources for the Federation between June 2023 and December 2025.

The government has clarified that the N15.8 trillion should not be interpreted as cash sitting in a single Federal Government account. Rather, it represents resources mobilised across the Federation following the end of subsidy payments.

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Of the amount, approximately N5.4 trillion accrued to the Federal Government, while about N10.4 trillion was shared among state and local governments through the Federation Account.

The breakdown released by the government put the Federal Government’s share at about N5.43 trillion, states at N6.52 trillion and local governments at N3.88 trillion.

The figures have fuelled calls for greater transparency, particularly over the use of the funds by state and local governments.

The Nigeria Employers’ Consultative Association (NECA) has also called on states and local governments to account for the estimated N10.4 trillion they received from resources linked to the subsidy reform.

The organisation said Nigerians should be able to identify the impact of increased allocations in infrastructure, public services and other areas that directly affect their quality of life.

The Federal Government, however, has maintained that the subsidy removal policy was necessary to reduce pressure on public finances and redirect resources towards infrastructure, social programmes and other development priorities.

Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, has explained that the N15.8 trillion figure represents resources freed within the wider fiscal system rather than a single pool of money available for discretionary spending.

The Federal Government has also pointed to increased spending on infrastructure and social investment since the policy was introduced.

According to government figures, about N6.47 trillion in additional expenditure was committed to strategic infrastructure between June 2023 and December 2025, while more than N400 billion was committed to major social investment initiatives.

President Bola Tinubu has repeatedly defended the decision to remove the subsidy, arguing that the policy was financially unsustainable and that reversing it could undermine the country’s economic recovery.

The President has also criticised calls for a return to the previous subsidy system, arguing that such a move could recreate the fiscal problems associated with the old arrangement.

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The debate has nevertheless remained politically sensitive, especially as Nigeria approaches the 2027 general elections.

Presidential candidate of the African Democratic Congress (ADC), Atiku Abubakar, has said he would restore the petrol subsidy if elected, arguing that Nigerians have not received sufficient benefits from its removal.

Atiku has maintained that his position is based on the need to reduce the burden of high fuel and living costs on Nigerians, while the Federal Government has warned that returning to the old subsidy model could reverse some of the economic gains recorded since 2023.

The subsidy debate is also likely to remain a major campaign issue as political parties present competing approaches to petrol pricing, inflation, public spending and economic reform.

For Falana, however, the central issue is not simply whether the fuel subsidy should be restored or permanently abolished but whether governments are properly accounting for the resources that became available after its removal.

He urged Nigerians to scrutinise government finances more closely and demand explanations from public officials at every level.

“Yes, state governments are getting more money. The Federal Government is getting more money. Local governments are getting more money on paper. It is the duty of the Nigerian people now to demand accountability,” Falana said.

The controversy therefore extends beyond the question of subsidy removal itself. It has increasingly become a debate over transparency, public spending and whether the financial resources freed by the policy are translating into better infrastructure, stronger public services and improved living conditions.

As the 2027 political season approaches, the question of how Nigeria’s governments have used the additional resources available since the end of the petrol subsidy is expected to remain at the centre of the country’s economic and political conversation.

Fuel subsidy removal: Falana demands accountability over N15.8tr resources, warns against ‘scam’ era

Fuel subsidy is a scam, petrol can sell for N200/litre – Donald Duke

The presidential candidate of the Peoples Redemption Party (PRP), Donald Duke, has described Nigeria’s fuel subsidy policy as a “scam”, arguing that petrol could sell for about N200 per litre if the country properly harnesses its crude oil, natural gas and other energy resources.

Duke made the statement amid renewed political debate over the future of petrol subsidy in Nigeria, following comments by the presidential candidate of the African Democratic Congress (ADC), Atiku Abubakar, who said he would introduce targeted subsidies to cushion Nigerians from the impact of high fuel and transportation costs if elected president in 2027.

Atiku’s position has reignited arguments over the decision by President Bola Tinubu to remove petrol subsidy shortly after assuming office in May 2023. The Tinubu administration has consistently defended the policy, arguing that the former subsidy regime was financially unsustainable and consumed resources that could be channelled into infrastructure, social programmes and other development priorities.

The Federal Government has also rejected calls for a return to the old subsidy arrangement, maintaining that subsidy removal has strengthened public finances and increased the resources available to the three tiers of government.

Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, recently said the removal of petrol subsidy generated N15.8 trillion in resources for the Federation between June 2023 and December 2025. He said the amount included N5.4 trillion received by the Federal Government and N10.4 trillion shared among state and local governments through the Federation Account.

The government has presented the figures as evidence that subsidy removal has created fiscal space, although critics argue that the policy has also contributed to higher transportation, food and household costs.

Duke, however, questioned the basis of the subsidy argument, saying Nigeria’s natural resource wealth should make it possible to provide affordable petroleum products without relying on an expensive government subsidy system.

“Look, I don’t believe there’s any subsidy in fuel,” Duke said.

“For a barrel of crude oil, there are about seven by-products. The two consequential ones are diesel and petrol – PMS and AGO – and kerosene, aviation fuel and all those things.

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“You sell them at commercial rates, okay? Work it out. You can almost sell petrol today at N200 a litre, not the N1,000-plus.

“So that thing about subsidy, I think, is the biggest scam that has been perpetrated, maybe globally.”

Duke’s N200 per litre petrol projection is his own assessment of what he believes could be achieved through better management of Nigeria’s energy resources. It does not represent the current pump price or an official pricing projection by the Federal Government or the Nigerian National Petroleum Company Limited (NNPCL).

Petrol prices remain substantially above that level in most parts of the country, although prices vary between locations and marketers.

The former Cross River State governor argued that Nigeria’s problem was not a lack of natural resources but the failure to convert those resources into affordable and reliable energy for citizens and businesses.

“You’re an energy-blessed country,” Duke said. “You have all known forms of energy existing in Nigeria – from the crudest, which is human labour, to hydrocarbons, solar, hydro, uranium and now lithium.

“You have all those things. Why are we still energy-poor? Because the political will is not there. But even beyond the political will, we’re not thinking through this.”

Duke also criticised the continued flaring of natural gas in Nigeria, arguing that a country struggling with electricity shortages should not be wasting a valuable energy resource.

“We easily flare two billion cubic feet of gas a day,” he said. “That is equivalent to 20 million litres of diesel.

“If you had a turbine to power all of Africa, it would not consume 20 million litres of diesel daily.

“So, it’s akin to the abundance of water while the fish is thirsty.”

The argument comes at a time when Nigeria is attempting to increase domestic oil refining and reduce its dependence on imported petroleum products.

Data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) showed that domestic refineries supplied billions of litres of petrol during the first seven months of 2026, with the Dangote Petroleum Refinery accounting for a significant share of domestic production.

The increased refining capacity has altered Nigeria’s downstream petroleum market, but domestic production has not completely eliminated the need for imports. Supply levels and petrol prices continue to fluctuate depending on refinery output, crude availability, logistics, international oil prices and other market conditions.

Duke maintained that Nigeria should focus on using its natural endowments to lower production costs rather than relying primarily on international price comparisons.

“When I hear excuses like, ‘Oh, it’s cheaper in America,’ or, ‘We’re cheaper than it is in America,’ every country has its own endowments,” he said.

“You’ve got to use what you’ve got to get what you want. We are an energy-blessed country. The people should feel their blessings.”

He further questioned Nigeria’s energy strategy, pointing to the country’s participation in the West African Gas Pipeline while domestic industries and households continue to experience inadequate gas and electricity supplies.

“You have a West African Gas Pipeline, but you don’t have any self-sufficiency in gas in your country,” Duke said. “There’s something wrong somewhere. We’re not thinking.”

The PRP candidate argued that Nigeria’s energy crisis could be addressed through stronger political commitment, better infrastructure, increased domestic refining and more effective utilisation of the country’s oil and gas resources.

His position differs from both the Tinubu administration and Atiku’s proposed approach. While the Federal Government maintains that subsidy removal was necessary to protect public finances, Atiku is advocating targeted government intervention to reduce the burden of high energy costs, while Duke argues that Nigeria should use its resource advantage to make energy cheaper without depending on a conventional subsidy regime.

The renewed fuel subsidy debate is expected to remain a major issue ahead of the 2027 presidential election, particularly as political parties and candidates seek to address the effects of high petrol prices on transportation, food prices, businesses and household incomes.

For Duke, the central question is not simply whether Nigeria should restore or retain petrol subsidy, but why a country with vast oil, gas and other energy resources continues to struggle with high energy costs.

“Why are we still energy-poor?” Duke asked. “The political will is not there. We’re not thinking through our problems.”

Fuel subsidy is a scam, petrol can sell for N200/litre – Donald Duke