Nigeria’s largest refining facility, the Dangote Petroleum Refinery and Petrochemicals, says it is prioritising domestic fuel supply to cushion Nigeria and parts of West Africa from emerging global energy disruptions triggered by escalating tensions in the Middle East.

The refinery disclosed that the geopolitical crisis has already disrupted global refining operations, reduced petroleum product availability and pushed up both crude oil and freight costs across international markets.

According to the company, several refineries across the Middle East region have scaled down operations due to the instability, tightening global supply chains for gasoline, diesel and other petroleum products.

At the same time, China — one of the world’s largest energy market players — has reportedly restricted exports of gasoline and diesel, further amplifying supply pressures in international fuel markets.

Dangote Refinery said the situation underscores the strategic importance of domestic refining capacity in protecting national economies from global energy shocks.

“This is leading to a global scarcity of petroleum products. The Dangote Refinery will 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 company said.

Rising Global Energy Costs

The refinery disclosed that the Middle East conflict has sharply pushed up crude oil and shipping costs, developments that are already feeding into higher fuel prices globally.

Benchmark Brent crude prices have surged significantly, rising by roughly 26 percent to above $84 per barrel since the conflict escalated.

In response to the cost escalation, Dangote Refinery recently implemented a ₦100 per litre adjustment in the ex-depot price of Premium Motor Spirit (PMS), representing about a 12 percent increase.

However, the refinery said it has absorbed nearly 20 percent of the cost increase internally in order to cushion Nigerian consumers from the full impact of rising global prices.

Despite operating locally, the refinery continues to purchase crude oil at prevailing international market rates, whether sourced domestically or from foreign suppliers.

Crude Supply Shortfall from NNPC

One of the major challenges confronting the refinery is insufficient crude supply from the Nigerian National Petroleum Company Limited.

Dangote Refinery disclosed that it currently receives only five crude cargoes per month from NNPC, far below the 13 cargoes required monthly to sustain full domestic production capacity.

The shortfall is forcing the refinery to procure additional crude from international traders at significantly higher prices.

According to the company, Nigerian crude is currently priced $3 to $6 above Brent, and after freight charges of about $3.50 per barrel, the landed cost rises to between $88 and $91 per barrel.

This contrasts sharply with the $68 per barrel landing cost that prevailed when the refinery’s PMS ex-depot price stood at ₦774 per litre.

The refinery warned that such supply gaps expose structural weaknesses in Nigeria’s domestic crude supply framework, especially at a time when global energy markets are facing heightened geopolitical risks.

Domestic Refining as Strategic Buffer

The refinery emphasised that despite the pressure, it will continue to prioritise Nigeria’s domestic fuel market rather than export opportunities.

The company said domestic refining reduces Nigeria’s exposure to global supply shocks while lowering foreign exchange demand associated with petroleum imports.

By producing refined products locally, Nigeria is also able to stabilise fuel supply and moderate price volatility in the domestic market.

Dangote Refinery said it intends to remain a critical stabilising force for Nigeria’s energy market during periods of international supply disruptions.

BRANDECONOMY Insight

The Dangote Refinery’s emergence as a stabilising force during a global energy shock represents one of the most consequential structural shifts in Nigeria’s petroleum sector in decades.

1. Domestic Refining Becomes National Security Asset

For decades, Nigeria depended heavily on imported refined products despite being one of the world’s largest crude oil producers. The commissioning of large-scale domestic refining capacity significantly reduces vulnerability to global supply disruptions.

2. Crude Supply Policy Remains a Structural Challenge

Despite the refinery’s capacity, inconsistent crude supply from upstream producers continues to limit the full realisation of domestic refining potential. Resolving crude allocation and pricing frameworks will be critical to ensuring refinery stability.

3. Africa’s Emerging Energy Anchor

Beyond Nigeria, the refinery is increasingly positioning itself as a regional fuel supply hub capable of supporting energy security across West and Central Africa, particularly during global market volatility.

If supply coordination improves and infrastructure constraints are addressed, Nigeria could transition from Africa’s largest importer of refined products to one of its most important energy exporters.