Dangote Raises Petrol to N1,200/Litre Despite Crude Price Decline – Second Hike in Five Days

Refinery implements N15 increase even as Brent crude falls by $5, raising questions about domestic pricing dynamics.

Dangote Petroleum Refinery and Petrochemicals FZE has increased the gantry price of Premium Motor Spirit (petrol) from N1,185 to N1,200 per litre, effective August 26, 2026, marking the second price adjustment in less than a week and adding to the financial burden on Nigerian consumers. The latest increase comes despite a notable decline in international crude oil prices, raising fresh questions about the factors driving domestic fuel costs in Africa’s largest economy.

In an official communication to customers issued on Tuesday, the refinery’s Group Commercial Operations announced revised depot prices for gantry and coastal deliveries. The email, titled ‘PMS Price Change Communication (N1,185 per Litre To N1,200 Per Litre)’, directed customers to take note of the revised prices effective from Wednesday. According to the price table contained in the notice, the coastal price rose from N1,562,265 per metric tonne to N1,582,380, representing an increase of N20,115 per metric tonne. The refinery further instructed customers to return all Authorisation to Collect documents for repricing, adding that new volume contracts would be issued for immediate loading resumption.

The latest adjustment represents a N15 per litre increase in the gantry price and comes barely five days after the refinery raised the price from N1,165 to N1,185 per litre on August 21. The two adjustments have therefore added N35 per litre to the refinery’s gantry price within a short period, a development that is expected to transmit pressure through the downstream market and potentially push pump prices to an average of N1,250 per litre as marketers factor in transportation and other costs.

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The timing of the increase has raised eyebrows among industry observers, coming as international crude prices have moved in the opposite direction. When Dangote announced the previous N20 increase on August 20, Brent crude stood at approximately $93.48 per barrel amid heightened concerns over supply disruptions and tensions around the Strait of Hormuz. However, by Tuesday, Brent crude had fallen by $3.74 to $88.43 per barrel as the market reacted to new United States sanctions on Iran, representing a decline of about $5 per barrel, or more than five per cent, over the period.

Data from oilprice.com on Tuesday showed West Texas Intermediate crude trading at $82.13 per barrel, down $2.88 or 3.39 per cent, while Brent crude stood at $88.37 per barrel, declining by $3.80 or 4.12 per cent. Murban crude also fell to $92.71 per barrel, shedding $8.73 or 8.61 per cent. Reuters reported that oil prices fell as investors viewed the latest US sanctions against Iran as less threatening to global oil supplies than a military escalation. The contrast means that while the refinery increased its PMS price when crude was above $93 per barrel, it is implementing another increase when the international benchmark has dropped below $89. This divergence between falling international crude prices and rising domestic petrol prices is likely to fuel fresh debate over the factors determining pump prices in Nigeria’s deregulated downstream petroleum market.

Industry analysts point to structural factors beyond international crude prices that explain the disconnect between global benchmarks and local fuel costs. The primary challenge lies in the naira-for-crude arrangement between the Nigerian National Petroleum Company (NNPC) and the Dangote Refinery. Under this programme, Dangote was expected to receive crude oil in naira at a discounted rate, enabling it to produce petrol at lower costs for domestic consumption. However, a significant shortfall in supply has undermined this arrangement. According to refinery management, Dangote receives only about five crude cargoes per month under the naira programme, far short of the thirteen cargoes required for full capacity operations. This forces the refinery to procure the remaining cargoes using foreign exchange, exposing production costs to the volatile naira-to-dollar exchange rate and international crude prices.

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A senior refinery official, speaking on condition of anonymity, confirmed that the Federal Government has promised to make dollars available to the refinery in exchange for the petrol it sold in naira, as the refinery had bought crude oil in dollars. Under the proposed arrangement, the government would supply enough foreign exchange to cover the refinery’s crude import costs, which run into billions of dollars. The Dangote refinery was supposed to receive about 13 million barrels of crude monthly under the naira-for-crude deal but has since been getting less than 35 per cent of this allocation, thereby relying on crude imports from Ghana, the United States, Angola, and recently the United Arab Emirates. Official cargo records show the refinery imported 40.40 million barrels of crude between May and June 2026 at a combined cost of about $4.48 billion, with May cargoes averaging $124.80 per barrel and June cargoes averaging $95.25 per barrel.

The price increase comes against a backdrop of broader concerns about Nigeria’s ability to supply its growing domestic refining capacity. Analysts note that Nigeria’s petroleum challenge is shifting from inadequate refining capacity to insufficient crude availability, as domestic refining capacity expands while upstream production struggles to meet competing demands for refinery feedstock, export obligations, and crude-backed financing commitments. Nigeria’s crude oil output hit 1.56 million barrels a day in June 2026, the highest since 2020, but still a fraction of what a fully built-out domestic refining sector will eventually demand. Dangote’s 650,000-barrel-per-day plant alone, operating at 85 per cent utilisation, needs roughly 552,500 barrels of crude every day – about 35 per cent of everything Nigeria currently pumps out of the ground. Any slippage in production, a pipeline outage, or a security incident in the Niger Delta is sufficient to reopen the same allocation disputes that produce pricing volatility.

The persistent price hikes have compounded the economic hardship facing Nigerians, already grappling with a broader cost-of-living crisis following the removal of fuel subsidies in 2023. The N15 increase is expected to result in higher pump prices as oil marketers factor in transportation, landing, and other downstream costs, with petrol expected to return to an average of N1,250 per litre. For households reliant on petrol generators for electricity, the situation has become particularly dire. A typical middle-class family running a generator for six hours daily now faces significantly higher energy costs, making alternative power sources increasingly cost-effective. The Dangote Refinery, once hailed as a solution to Nigeria’s fuel import dependency, continues to face structural challenges that prevent it from delivering affordable fuel to Nigerians. The combination of inadequate naira-denominated crude supply, currency volatility, and the need to source crude internationally continues to push prices upward, creating a paradox where Africa’s largest oil producer and its newest refinery cannot shield citizens from high fuel costs.