Energy Analysts Shield Dangote Refinery from Pricing Allegations Amid Global Crude Surge and Domestic Market Deregulation

Energy experts clarify Dangote Refinery's petrol pricing, citing global crude spikes near $120/barrel and differences between coastal and gantry delivery rates.

By: AXL Media

Published: Mar 9, 2026, 8:46 AM EDT

Source: The information in this article was sourced from The Guardian

Defending Local Refining Against Market Misinformation

Energy analysts within Nigeria’s downstream petroleum sector have moved to clarify the pricing structure of the Dangote Petroleum Refinery, responding to allegations of price manipulation by certain fuel marketers. These experts contend that public narratives often fail to account for the complexities of a deregulated market, where the refinery must purchase crude at international rates. While some critics have linked recent price hikes exclusively to the facility, specialists point out that fuel importers are bringing products into the country at nearly 1,000 Naira per litre, a figure comparable to the refinery’s own output costs. The defense emphasizes that local refining serves as a critical buffer against the severe shortages that would otherwise plague the nation.

Clarifying the Distinction Between Coastal and Gantry Pricing

A significant portion of the public debate stems from a misunderstanding of the logistical differences between coastal delivery and ex-depot prices. Analysts explained that the 948 Naira per litre rate represents the cost of petroleum transported via marine vessels to coastal depots. In contrast, the gantry price of approximately 995 Naira per litre applies to marketers who load product directly into tanker trucks at the refinery. According to industry specialists, these two figures are not conflicting but rather reflect distinct transportation arrangements within the distribution chain. Failing to recognize these logistical nuances often leads to skewed comparisons that unfairly characterize the refinery’s pricing strategy.

Crude Volatility and the Impact of Global Market Rates

The economic reality for the refinery is dictated by the sharp rise in global crude oil prices, which directly influences production expenses. Energy analyst David Okon noted that when the refinery initially priced petrol at 774 Naira per litre, crude oil was landing at approximately $68 per barrel. However, with international benchmarks now trading significantly higher, the cost of raw materials has forced a necessary adjustment in output prices. As a private entity operating in a deregulated environment, the refinery cannot subsidize the difference between domestic expectations and global market realities without compromising its operational viability.