The Dangote Petroleum Refinery may be heading for another petrol gantry price review as international crude prices surge, barely days after the refinery’s third price increase in eight days. The latest rally has intensified concerns across Nigeria’s downstream market, with crude prices gaining about 5 per cent within 24 hours, while some depot owners in Lagos have stopped sales yesterday in anticipation of a possible upward adjustment.
The refinery’s recent price reviews have been driven by movements in international crude prices and rising shipping costs. Dangote increased its petrol gantry price from ₦1,165 to ₦1,185 per litre, then to ₦1,200 and finally ₦1,265 per litre on August 29. The successive adjustments have progressively raised the wholesale cost of petrol and placed the market on alert for the refinery’s next pricing decision.
As at the time of writing 06:10 am (WAR), Brent crude was trading at $95.48 per barrel, up 0.88 per cent, while WTI stood at $90.69 per barrel, up 0.52 per cent. The benchmark prices have risen sharply as renewed US-Iran military confrontation raises the risk of further disruption to crude supplies and shipping through the Strait of Hormuz.
A source at Dangote Refinery told Petroleumorice.ng that the refinery would review its petrol price if international crude prices remain elevated. The source, however, stressed that the refinery was not interested in repeatedly changing its price and was carefully studying the market before taking another decision.
According to the source, the key consideration is the impact of the sustained crude rally on replacement costs. The refinery is therefore assessing whether the current increase in international crude prices will persist, rather than reacting immediately to every short-term movement in the market.
The pressure is already evident at the depot level. Petroleumprice.ng checks on September 1 showed Integrated, Sahara, Ascon and African Terminal at ₦1,269 per litre, while Pinnacle was selling at ₦1,267 per litre. The prices put Lagos depot levels above Dangote’s current ₦1,265 per litre gantry price, before transportation, financing and other distribution costs are factored into the final retail price.
The situation has created a delicate pricing environment for marketers. Holding stocks becomes more expensive when replacement costs are rising, while selling at yesterday’s price carries the risk of having to replenish inventories at a higher cost. This explains why some depot operators were reportedly cautious about releasing products yesterday as the market awaited the direction of Dangote’s next price review.
Beyond the domestic market, the immediate trigger remains the international crude market. The renewed US-Iran hostilities, coupled with reports of attacks involving commercial vessels around the Strait of Hormuz, have strengthened the geopolitical risk premium in crude. If Brent sustains its move above $95 and shipping costs remain elevated, the pressure for another Dangote petrol gantry price adjustment is likely to intensify.