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

Published

1 month ago

August 31, 2026

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

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FRSC hands over Safeline Bank to ROBOPAY, targets digital financial transformation

Published

8 hours ago

October 5, 2026

Trends Admin

FRSC hands over Safeline Bank to ROBOPAY, targets digital financial transformation

The Federal Road Safety Corps (FRSC) has handed over ownership of Safeline Microfinance Bank to ROBOPAY NIG. LTD., paving the way for a major recapitalisation and technology-driven transformation of the financial institution.

The divestment, which took place on Monday, October 5, 2026, at the bank’s premises in Abuja, is expected to reposition Safeline Microfinance Bank for stronger competitiveness, improved service delivery and sustainable growth in Nigeria’s rapidly evolving financial services sector.

The development, according to a statement by the Corps Public Education Officer, Osondu Ohaeri, is part of the strategic efforts under the leadership of the Corps Marshal, Shehu Mohammed, to reposition the institution for greater efficiency and competitiveness.

Safeline Microfinance Bank was established by the FRSC to provide financial services and opportunities to members of the Corps and other stakeholders.

Speaking at the handover ceremony, Chairman of the Board of Safeline Microfinance Bank, Ibrahim Babagana, a Deputy Corps Marshal (Rtd.), said the decision to divest the bank followed a careful assessment of the prevailing regulatory environment and emerging government policies affecting the microfinance banking industry.

Babagana said sustaining the bank under the changing financial landscape would require substantial additional capital, greater investment in technology and enhanced human capital.

He explained that the Board therefore resolved to transfer ownership to an investor with the capacity, resources and commitment to make the required investments and place the bank on a sustainable growth trajectory.

The former FRSC chief expressed confidence in ROBOPAY, saying the company had demonstrated the competence, commitment and vision required to build on the foundation established by the Corps and take Safeline Microfinance Bank to a new level.

He identified strengthening the bank’s capital base, deploying modern technology and investing in human resources as critical priorities for its survival and competitiveness in the increasingly digital financial services market.

Responding on behalf of ROBOPAY NIG. LTD, Malam Aliyu Abiodun thanked the Board and management of Safeline Microfinance Bank for the confidence reposed in the company, describing the acquisition as a significant milestone and an opportunity to unlock the institution’s considerable potential.

Abiodun said the bank already had valuable assets, structures and an institutional foundation which the new owners would build upon through strategic investments in financial technology, capital and human resources.

He said ROBOPAY would deploy FinTech solutions to modernise the bank’s operations, improve customer experience, expand its service offerings and strengthen its competitive position within Nigeria’s financial services industry.

According to him, the new ownership would retain and leverage the institutional foundation created by the FRSC while introducing innovative technology-driven solutions capable of opening new growth opportunities for the bank.

The transaction thus signals more than a change in ownership, as it ushers Safeline Microfinance Bank into a new phase anchored on recapitalisation, digital innovation and professionalised financial services.

Both parties expressed commitment to ensuring a seamless transition, with the ultimate objective of building a stronger, more competitive and sustainable institution capable of delivering greater value to its customers and stakeholders.

Business

Tantita Operations Push Oil Export Earnings to $9.39bn in Q2

Published

24 hours ago

October 5, 2026

Trends Admin

High Chief Government Oweizide Ekpemupolo, popularly known as Tompolo

Tantita Operations Push Oil Export Earnings to $9.39bn in Q2

Nigeria’s crude oil export earnings rose to $9.39 billion in the second quarter of 2026, with improved pipeline security, higher production and greater stability in the Niger Delta supporting the stronger performance.

Provisional Balance of Payments (BOP) data showed that Nigeria’s total goods exports increased to $20.08 billion in Q2, up from $15.56 billion in the first quarter.

Crude oil exports increased by 15.78 per cent to $9.39 billion, while natural gas exports climbed by 40.15 per cent to $3.63 billion.

The improvement has renewed attention on the role of pipeline security in protecting Nigeria’s oil production and ensuring that crude reaches evacuation points and export terminals.

Among the companies involved in pipeline surveillance in the Niger Delta is Tantita Security Services Nigeria Limited (TSSNL), which was engaged by the Federal Government to protect oil pipelines and other critical petroleum infrastructure.

Tantita’s operations, carried out alongside government security agencies, have focused on tackling oil theft, illegal bunkering and pipeline vandalism and improving the security of facilities used to transport crude oil.

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Industry stakeholders have linked the improved operating environment in the Niger Delta to increased crude production and stronger export performance. However, the rise in export earnings cannot be attributed to Tantita alone, as production volumes, international oil prices, investments, operational efficiency and wider government measures also influence export receipts.

The broader export figures also showed significant improvements across other sectors of the petroleum industry.

Refined petroleum product exports increased by 66.24 per cent to $3.94 billion, while non-oil exports rose by 25.30 per cent to $3.12 billion during the quarter.

At the same time, Nigeria’s crude oil imports fell sharply from $1.39 billion in Q1 to $580 million in Q2, further strengthening the country’s external position.

The stronger export performance helped push Nigeria’s current account surplus to $7.54 billion, representing a 67.93 per cent increase from the $4.49 billion recorded in Q1. The figure was also higher than the $5.17 billion recorded in Q2 2025.

The increase in the current account surplus was driven largely by higher export earnings and an improved goods account.

The rise in crude earnings also coincided with stronger production, with Nigerian crude output reaching about 1.56 million barrels per day in June 2026, excluding condensates.

The development is significant for Nigeria, which has struggled in recent years to consistently meet its production potential because of crude oil theft, pipeline vandalism, ageing infrastructure and underinvestment in the upstream sector.

Improving security around oil-producing assets has therefore become a key part of efforts to raise output and increase foreign-exchange earnings.

Tantita, led by High Chief Government Oweizide Ekpemupolo, popularly known as Tompolo, has been at the centre of the Federal Government’s pipeline surveillance arrangement in the Niger Delta.

Stakeholders, however, say sustained growth in oil earnings will require more than surveillance operations. They have called for continued investment in exploration and field development, improved infrastructure, enhanced recovery from mature fields and faster development of major deepwater projects.

The Federal Government has also been pursuing measures aimed at attracting fresh investment into Nigeria’s upstream sector, including fiscal incentives for deepwater oil and gas projects.

For Nigeria, the latest export figures offer a boost at a time when the country is seeking stronger foreign-exchange inflows, increased oil production and greater fiscal revenues.

The challenge now is to sustain the improvement by keeping petroleum infrastructure secure, reducing crude losses and ensuring that higher production translates into consistent export earnings and broader economic benefits.

Tantita Operations Push Oil Export Earnings to $9.39bn in Q2

Business

Dangote Sets 40-Month Deadline for $16bn East Africa Refinery in Kenya

Published

5 days ago

October 1, 2026

Trends Admin

Dangote Sets 40-Month Deadline for $16bn East Africa Refinery in Kenya

Nigerian industrialist Aliko Dangote has set a 40-month completion target for his planned $16 billion East Africa refinery in Lamu, Kenya, following the official groundbreaking of the project.

Dangote and Kenyan President William Ruto broke ground for the 700,000-barrel-per-day (bpd) refinery on Wednesday, September 30, 2026, with the facility designed to supply refined petroleum products to Kenya and other countries across the region.

Dangote said the refinery would be commissioned within 40 months.

“We will come back here and commission this refinery in 40 months from today,” he said at the ceremony.

The Dangote East Africa Petroleum Refinery and Petrochemicals Complex is expected to process about 700,000 barrels of crude oil daily, making it one of the largest refining projects in Africa and, when completed, potentially the world’s largest single-train refinery.

The project is expected to produce petrol, diesel, jet fuel, polypropylene and base oil, with the products targeted at Kenya and wider East African markets. Dangote has also said part of the refinery’s jet-fuel output could be supplied to Europe and the United Kingdom.

The facility will also include a planned 1,000-megawatt power plant, which Dangote said would provide electricity for the wider industrial complex.

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Beyond refining, the billionaire said the project would create an industrial ecosystem covering petrochemicals, logistics, engineering, marine services, manufacturing, technology and small and medium-sized enterprises.

Dangote also announced plans for a training school that would prepare 1,000 Kenyan engineering graduates for opportunities associated with the project. The wider development is expected to generate thousands of jobs across the refinery and related industries.

The project has attracted major international engineering and technology partners, with Honeywell Technologies providing process technologies, licensing, engineering services, catalysts, equipment and digital solutions.

The use of established designs and experience from Dangote’s Nigerian refinery is expected to shorten the development schedule compared with a typical new refinery.

Engineers India Limited is also involved in the project under a major engineering and project-management contract.

Dangote’s Kenyan project is modelled partly on the experience of his 650,000-bpd refinery in Lagos, with the new facility expected to draw on technology and engineering experience gained from the Nigerian plant.

The refinery is expected to source crude from Uganda and other African producers, while serving a market extending beyond Kenya to countries including Uganda, Rwanda, Tanzania, Ethiopia and South Sudan.

Regional leaders who attended the groundbreaking included Ugandan President Yoweri Museveni and Ethiopian Prime Minister Abiy Ahmed, alongside other African leaders and former Nigerian President Olusegun Obasanjo.

President Ruto described the project as an investment in energy security, industrialisation and regional integration, while stressing the importance of ensuring that Kenyan citizens benefit from the employment and training opportunities created by the refinery.

Dangote has also proposed allowing governments in the region to take a combined 30 per cent stake in the refinery, potentially giving participating countries an opportunity to benefit financially from the project.

However, the project faces a legal challenge over the land on which it is being developed. A Kenyan court ordered parties to maintain the status quo over a disputed parcel in Lamu after residents challenged the development, citing ancestral land claims and other concerns.

Environmental concerns have also been raised over the potential impact of the project on the coastal ecosystem and the wider Lamu area.

Despite the legal and environmental issues, Dangote has said the project will proceed.

Once completed, the $16 billion Kenya refinery is expected to increase refining capacity in East Africa, reduce dependence on imported petroleum products and support the region’s broader industrialisation drive.