AT the backdrop of excruciating retail prices of petrol across Nigeria despite the operation of domestic refining capacity, management of Dangote Refinery has indicated that the cushioning effect expected from its operations has been affected by global market forces including the crises in the middle-east, the world’s crude oil hub.

Speaking on Arise television interview the, Managing Director of the refinery, David Bird, stated: “On fuel pricing, the refinery is fully exposed to global market forces and operates without subsidies, making it vulnerable to fluctuations driven by geopolitical tensions.

“We try and maintain some stability within a commercially acceptable range, but all our cost inputs—from crude to freight and insurance—are impacted.”

A quick market survey yesterday by Vanguard indicated that the decline in crude oil prices early this week has not been reflected in the pump prices of petrol contrary to immediate upwards adjustments effected when the crude oil prices went up.

As at yesterday, the nearly 20 percent upward adjustment in petrol pump prices across all petrol stations in Nigeria last week following the further rise in the international market price of crude oil, remains in force as marketers sold at a national average of N1,300 per litre.

Bird acknowledged the burden on consumers, describing the current situation as a broader cost-of-living crisis.

“This is a cost-of-living crisis; every facet of the modern economy is impacted by energy,” Bird said, adding that even if global conflicts ended immediately, supply chain disruptions would persist for months.

Looking ahead, Bird urged Nigerian authorities to rethink broader cost structures and regulatory pressures affecting the industry.

“I think there’s an opportunity for the government to take an all-encompassing view, not just crude price, but the cost of doing business in Nigeria,” he said. He also emphasised the importance of long-term planning, including building strategic reserves. “Government and industry must think the unthinkable; COVID should have woken us up about the vulnerability of global supply chains,” he noted.

Meanwhile, Bird also complained over crude allocation system employed by the petroleum sector authorities in Nigeria which under-supplies the Dangote Refinery, forcing it to rely on imported crude oil.

He stated: “Nigeria has a wide variety of crude grades, all exported from different terminals and we have a preference. Our hardware is designed around a certain crude slate, and we can certainly optimise the different crude grades from Nigeria. So, we submit our preferences. And not only do we not get the full allocation, very often we don’t get the grades that we are highlighting as our preferences.

“So, our request is, can we get more and can we be transparent on the allocation methodology? Because then that allocates about 30% of our crude diet under the Crude for Naira program. However, given our preference for Nigerian grades, we go back into the international market and we find those very same grades that we have preference that were denied to us, now being offered on the international market in US dollars. And so, we do purchase those. And right now, there’s obviously a global thirst for crude, no matter where it comes from. So that has meant there’s a significant premium being attached to Nigerian crude grades.

“As of now, we’re paying over $18 a barrel premium for those same Nigerian crude grades. So, 30, 35% under Crude for Naira, we get allocated with no discount, no subsidy. It is international benchmark pricing. Then, we have to pay international benchmark freight rates. And freight has also been severely impacted and gone up, insurance rates, et cetera”.