Justifies adjustment of N100 per litre in its ex-depot price of PMS
Accelerating deployment of CNG-powered trucks to cushion impact of global shocks
DESPITE the high crude cost across the world, Dangote Petroleum Refinery has alleged that upstream producers have failed to supply crude oil to the refinery as required under the Petroleum Industry Act (PIA).
This, according to a statement on Thursday, has forced the refinery to source a substantial portion through international traders, who charge at international market prices, an additional premium.
Going by the conflict in the Middle East, which has led to the shutdown of some refineries and cut in refinery production across the world, Dangote Refinery reassured Nigerians of its unwavering commitment to serving as a stabilising force amid recent shocks in the international oil market.
Dangote explained that the refinery received five cargos monthly from NNPC, adding that apart from being priced at international market prices, the supply fell short of the 13 cargos required to support sales into Nigeria.
“While we receive about five cargos a month from NNPC which we pay for in Naira, these cargos are priced at international market prices + Premium and fall short of the 13 cargos which we require to support sales into Nigeria. We therefore end up procuring foreign exchange at open market rates to pay for crude cargos purchased from local and international traders,” the statement read.
The conflict in the Middle East, the refinery said is leading to a global scarcity of petroleum products, pointing out that Ghana had banned export of gasoline and diesel.
Despite this, Dangote Refinery said it would ensure that Nigeria is insulated from these supply shocks by prioritising supply to the domestic market.
“This is one of the many benefits of domestic refining,” the statement said.
It noted that the conflict has driven global crude and freight prices sharply higher, with benchmark Brent prices rising by about 26 per cent within a short period, to above $84.0 per barrel.
In response, Dangote refinery said it implemented a measured adjustment of N100 per litre in its ex-depot price of Premium Motor Spirit, representing an increase of about 12 per cent.
“The refinery has absorbed 20 per cent of the cost escalation, for now, to cushion the domestic market. This is despite continuing to source crude at prevailing international market prices, whether purchased locally or from foreign suppliers,” it stated.
Dangote Refinery said it is also accelerating deployment of Compressed Natural Gas-powered trucks to cushion the impact of global shocks, enhance nationwide distribution efficiency, reduce logistics costs and improve delivery timelines across the downstream sector.
The rollout is scheduled to commence this month.