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INVESTIGATIVE REPORT: Does Dangote Refinery Have Genuine Grounds to Raise Petrol Prices to N995/litre?
INVESTIGATIVE REPORT: Does Dangote Refinery Have Genuine Grounds to Raise Petrol Prices to N995/litre?
By Oghenewoke Onoriode | Waterways News Research Reporter| March 7, 2026
THE CENTRAL QUESTION
The Dangote Petroleum Refinery’s justification for a N221 price hike within four days rests on one foundational claim: that it sources crude at international market prices and is therefore exposed to global oil price shocks. Our investigation finds this claim to be substantially true — but also structurally problematic, and one that raises serious questions about Nigeria’s energy policy failures, not just the refinery’s pricing decisions.
FINDING 1: THE REFINERY IS NOT PURELY DOMESTIC IN ITS CRUDE SOURCING — FAR FROM IT
This is perhaps the most critical finding of this investigation, and one the refinery does not loudly advertise in its public statements.
Dangote Refinery currently receives only five crude oil cargoes per month from NNPC — less than half of the 13 it needs to sustain full domestic supply. The shortfall of eight cargoes is sourced from other suppliers outside the country.
The scale of this foreign dependence is staggering. In 2025, the refinery bought approximately one-third of its crude from the United States, the lion’s share being West Texas Intermediate (WTI) Midland — sourced from crude fields around Midland, Texas, roughly 6,500 miles away.
“By mid-to-late 2025, U.S. crude had come to dominate the refinery’s feedstock mix for an extended period spanning several months, consistently outpacing Nigerian grades as the primary source of crude supply to the facility.”
In other words, this is not a local refinery sourcing local crude in any meaningful or sufficient sense. A refinery importing the majority of its feedstock from Texas and the Middle East, and paying for it in U.S. dollars at international market rates, is — by every economic measure — as exposed to global crude price shocks as any importer of finished petroleum products.
FINDING 2: EVEN THE NIGERIAN CRUDE IT BUYS IS PRICED AT INTERNATIONAL RATES — PLUS A PREMIUM
This is where the story gets even more complex. One might assume that the five monthly NNPC cargoes Dangote does receive are priced at a discounted or locally negotiated naira rate. They are not.
The cargoes received from NNPC under the naira-for-crude arrangement are priced at international market rates plus a premium. Nigerian crude oil costs $3 to $6 more per barrel above the Brent benchmark price. After adding freight of $3.50 per barrel, crude lands in Dangote’s tanks at between $88 and $91 per barrel.
For the additional eight cargoes sourced internationally, the refinery procures foreign exchange at open market rates to pay for crude purchased from local and international traders. Nigeria’s upstream producers have also failed to supply crude to the refinery as required under the Petroleum Industry Act (PIA), forcing the company to source a substantial portion through international traders who charge an additional premium.
This means there is essentially no subsidized or preferential pricing for Dangote despite the refinery being on Nigerian soil. Every barrel it processes costs it close to or above the full international market rate.
FINDING 3: THE NNPC’S SYSTEMIC FAILURE IS A ROOT CAUSE THE PUBLIC IS NOT BEING TOLD CLEARLY ENOUGH
NNPC has an economic incentive to sell its crude oil on international markets rather than to Dangote, because revenue from crude sales to the refinery is denominated in naira — a currency that has weakened relative to the U.S. dollar. NNPC’s ability to increase deliveries is also limited because crude oil production by NNPC and its partners has generally declined, falling from a peak of 2.4 million barrels per day in 2005 to 1.3 million barrels per day in 2024.
NNPC has committed much of its output to service deals with financial lenders, leaving the refinery to import crude from countries like the US and the Middle East.
This is the central structural irony: Nigeria is Africa’s largest oil producer, yet its flagship domestic refinery cannot get adequate Nigerian crude. The NNPC has pledged future oil production to international creditors, leaving Dangote to compete on the open international market like any other buyer — paying full dollar prices.
FINDING 4: ON THE SPECIFIC PRICE HIKE — THE NUMBERS ARE PARTIALLY JUSTIFIED, BUT ALSO PARTIALLY QUESTIONABLE
The refinery’s price increase is tied to a genuine surge in global Brent crude prices driven by Middle East conflict. Benchmark Brent prices rose by about 26% within a short period to above $84.0 per barrel. The refinery implemented a price adjustment of N100 per litre and says it has absorbed 20% of the total cost escalation to cushion the domestic market.
However, a sharp contradiction emerged simultaneously. Data from the Major Energies Marketers Association of Nigeria (MEMAN) showed that the landing cost of imported petrol stood at N809.37 per litre, about N64 cheaper than Dangote Refinery’s N874 per litre gantry price — and that was before the refinery added another N121 to reach N995.
This data point is damning. If imported petrol — which must cross oceans, pay shipping costs, and clear Nigerian ports — still lands cheaper than Dangote’s gantry price, it suggests the refinery’s cost pass-through to consumers may include more than just raw crude and freight costs. It may also include capital recovery costs on a $20 billion investment, operational inefficiencies, and margin protection.
FINDING 5: THE REFINERY IS SIMULTANEOUSLY EXPORTING, EVEN AS IT RAISES DOMESTIC PRICES
Since starting operations, the refinery’s supply has found its way into growing international markets including neighboring African countries, the Middle East, and Southeast Asia — and in 2025, it made its first petrol shipment to the United States.
The fact that the refinery is exporting product to international markets while simultaneously raising prices for Nigerian consumers and citing global cost pressures deserves scrutiny. While the refinery has the commercial right to operate this way under deregulation, Nigerians are right to ask whether “prioritizing the domestic market” — a phrase Dangote’s management uses frequently — is fully consistent with active export operations during a period of domestic price surges.
EDITORIAL VERDICT: PARTIALLY JUSTIFIED, BUT STRUCTURALLY BROKEN
The price increase has genuine economic grounding, but it exposes a much larger failure of Nigerian energy policy.
Dangote’s core argument — that it is exposed to international crude prices — is verified and accurate. The refinery is not, in any practical sense, a purely domestic crude processor. It sources the majority of its crude internationally, pays dollar prices, and operates in a fully deregulated market. Under those conditions, global price shocks will always pass through to Nigerian consumers.
However, several uncomfortable truths also stand:
– The promise that a domestic refinery would insulate Nigeria from global fuel price volatility has not materialized, because NNPC has failed to supply adequate local crude at preferential rates.
– Imported petrol is currently landing cheaper than Dangote’s product, which undermines the narrative that local refining is always cheaper for Nigerians.
– The Nigerian state — through NNPC’s failures, the naira’s weakness, and the PIA’s unimplemented crude supply obligations — is largely responsible for the structural conditions forcing Dangote to this price level.
– And critically: Nigerians are being asked to absorb international crude price shocks from a refinery they were told would end exactly that dependency.
The price hike is not fraudulent. But it is a symptom of a broken system — one that Dangote did not create, but which he now benefits from commercially, and which the Nigerian government has shown little urgency to fix.