Fuel Price Nears N1,400 as Dangote Hikes Gantry Price by N100 in 8 Days
The price of Premium Motor Spirit has climbed to between N1,310 and N1,400 per litre across Nigeria, following the third petrol price increase by Dangote Petroleum Refinery in eight days.
Dangote raised its gantry price by N65 per litre on August 29, from N1,200 to N1,265. This followed increases from N1,165 to N1,185 on August 21, and to N1,200 on August 26.
The three adjustments represent a total increase of N100 per litre, or about 8.6 per cent, in eight days.
The refinery said the hikes were due to the cost of crude purchased earlier and the time lag in securing, shipping and delivering crude to the refinery.
A senior executive, who spoke to _The PUNCH_ on condition of anonymity, said international crude prices on a given day could not determine the cost of petrol being produced from crude bought weeks earlier.
“If you want to buy crude at today’s price, when do you think you will complete the transaction? When will you get a ship chartered? When will the crude get into your tank?” the executive asked.
He added that the refinery still had large quantities of expensive crude in storage. “What will happen to the huge quantities of expensive crude that you bought long ago and stored in the tanks? These are the factors determining the change in prices,” he said.
The refinery directed customers to return existing Authorisations to Collect for repricing, with a new volume contract to be issued for loading.
The impact is already being felt at the pumps. Petrol is selling for about N1,310 per litre in Lagos and Ogun, while prices have risen to N1,350 and above in northern states. In some locations, the price is approaching N1,400 per litre.
The price difference is linked to transportation costs from the coastal refinery to distant markets. Dangote said it plans to extend its free distribution scheme nationwide to address this.
Data from the Major Energies Marketers Association of Nigeria showed Dangote’s gantry price of N1,265 was N42.68 above the August 27 spot import-parity estimate of N1,222.32 per litre.
IPMAN National Publicity Secretary, Chinedu Ukadike, said marketers were struggling to plan due to volatility. “We are facing the challenges of volatility in the market, government policies, and exchange rates,” he said.
He noted that Dangote had previously reduced prices in line with the international market but said current fluctuations made business planning difficult.
Brent crude closed at $88 per barrel on Friday, a 5 per cent drop, but the Dangote executive argued that daily crude movements do not immediately reflect in refined product prices due to procurement and shipping timelines.