Dangote Refinery Clarifies: Pricing Not Tied to Daily International Crude Oil Quotations

In its official statement, the refinery clarified that its pricing does not move in tandem with daily international crude oil quotations.

Added that Crude oil is procured weeks and in some cases months before it is processed, under commercial contracts linked primarily to monthly average pricing mechanisms rather than prevailing spot market prices.

The statement reads: “Dangote Petroleum Refinery & Petrochemicals remains committed to ensuring that Nigerians benefit from favourable market developments through fair, responsible and sustainable pricing of petroleum products.

Since May 30, 2026, Dangote Petroleum Refinery has reduced the ex-depot price of Premium Motor Spirit (PMS) by N200 per litre, Automotive Gas Oil (AGO) by N300 per litre and Jet A1 aviation fuel by N520 per litre, despite continuing to process crude oil acquired during a period when international crude prices were significantly higher than current levels.

“These reductions demonstrate our commitment to passing on cost efficiencies to consumers while maintaining the operational and financial sustainability of domestic refining.

“It is important to clarify that refinery pricing does not move in tandem with daily international crude oil quotations. Crude oil is procured weeks, and in some cases months, before it is processed, under commercial contracts linked primarily to monthly average pricing mechanisms rather than prevailing spot market prices.

“Consequently, the petroleum products currently being supplied from our refinery are being produced from crude inventories acquired at substantially higher costs than today’s market prices. The average landed cost of crude processed by the refinery was approximately US$124.80 per barrel in May and US$95.25 per barrel in June, compared with the current international benchmark of about US$71.01 per barrel.

“Furthermore, refinery feedstock is not purchased at the headline ICE Brent price commonly reported in the media. Our crude is acquired on a Dated Brent plus market premium, freight and logistics cost basis, resulting in actual landed costs that differ materially from benchmark quotations.

“Notwithstanding these elevated feedstock costs, Dangote Petroleum Refinery did not immediately transfer the full impact of rising crude prices to the Nigerian market. Instead, the refinery absorbed a substantial portion of the increase in order to support market stability, reduce inflationary pressures and shield consumers from the extreme volatility witnessed in global energy markets. For this reason, prices of petroleum products in Nigeria are still lower than prices in neighbouring countries even after adjusting for taxes.

“As lower cost crude cargoes progressively enter our production cycle, we have commenced a phased reduction in product prices.

“Today’s N50 per litre reduction is the fourth price cut in one month, bringing cumulative reductions to above N200 per litre on PMS. This approach ensures that pricing decisions are anchored on actual production economics and inventory costs rather than short term fluctuations in international oil markets.

“Nigeria today benefits from the stabilising role of domestic refining capacity. The Dangote Petroleum Refinery currently supplies volumes sufficient to meet national demand, helping to strengthen energy security, eliminate dependence on imports, conserve foreign exchange and provide greater price stability for consumers and businesses.

“As procurement costs continue to decline and lower priced inventories replace higher cost crude stocks, Nigerians can expect further price moderation, provided international market conditions remain favourable.”