The Dangote Petroleum Refinery has explained why declines in international crude oil prices do not immediately translate into lower petrol prices in Nigeria, disclosing that it spent about $4.48 billion importing crude oil over the past two months under supply contracts negotiated before the recent downturn in global oil prices.
The clarification comes amid mounting public pressure on fuel marketers and refiners to cut pump prices following the sharp fall in crude oil prices after tensions in the Middle East eased and global oil markets retreated.
In a statement on Sunday, the 650,000 barrels-per-day refinery said petroleum products currently reaching the domestic market are being refined largely from crude inventories purchased weeks or months earlier at significantly higher prices than prevailing international benchmarks.
According to the company, comparing daily Brent crude prices with domestic petrol prices creates a misleading impression because refinery feedstock is procured under forward contracts linked to monthly average prices rather than daily spot prices.
“It is important to clarify that refinery pricing does not move in tandem with daily international crude oil quotations,” the refinery said, noting that crude purchases are typically concluded several weeks or, in some cases, months before refining begins.
The refinery disclosed that it imported 40.40 million barrels of crude oil during May and June 2026.
Data released by the company showed that 21.47 million barrels imported in May cost $2.68 billion, while 18.93 million barrels brought in during June were valued at $1.80 billion.
The figures indicate that the refinery’s average landed crude cost declined from $124.80 per barrel in May to $95.25 per barrel in June, representing a drop of almost 24 per cent.
The company attributed the decline to softer international crude prices, lower freight charges and changes in the mix of crude grades purchased.
However, it noted that both monthly procurement costs remained substantially above the current Brent crude benchmark of around $71 per barrel, meaning petrol now being supplied was largely refined from higher-cost crude inventories acquired before the recent market correction.
The disclosure offers one of the clearest insights yet into the pricing dynamics at Africa’s largest refinery, whose operations have become central to Nigeria’s fuel supply since the removal of petrol subsidy and the gradual expansion of its commercial production.
Industry analysts have repeatedly noted that refinery economics differ from daily commodity market movements because crude oil procurement, shipping, refining and distribution involve long lead times. Consequently, reductions in international crude prices typically filter through to retail fuel prices only after existing inventories have been exhausted.
The refinery also revealed an increasingly diversified crude sourcing strategy as it ramps up operations.
Beyond Nigerian grades including Bonny Light, Qua Iboe, Escravos, Forcados, Amenam and Agbami, the refinery sourced crude from Libya’s El Sharara, Angola’s Cabinda and other regional blends.
The expanded sourcing comes as the refinery seeks to secure reliable feedstock amid persistent challenges with domestic crude supply. Earlier this week, Reuters reported that the refinery had imported crude from the United Arab Emirates for the first time, highlighting its growing flexibility in sourcing supplies from international markets.
Dangote Refinery further stated that it had absorbed part of the higher crude procurement costs instead of fully passing them on to consumers, arguing that the decision helped moderate inflationary pressures and promote greater price stability in Nigeria’s downstream petroleum market.
The company added that domestic refining has significantly reduced Nigeria’s dependence on imported petroleum products, improved energy security and eased pressure on the country’s foreign exchange reserves.
The explanation comes against the backdrop of growing calls by government officials, consumer groups and industry stakeholders for pump prices to more closely reflect movements in international crude prices.
Last week, the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, and the Federal Competition and Consumer Protection Commission (FCCPC) separately urged refiners and fuel marketers to ensure that consumers benefit from lower global crude prices, warning against price gouging and anti-competitive practices.
Dangote Refinery said Nigerians could still expect further moderation in petrol prices in the coming weeks as cheaper crude purchased recently gradually replaces higher-cost inventories, provided international oil prices remain relatively stable.
