Towards the end of last week the global oil prices climbed toward $110 per barrel reaching their highest levels since May as concerns about Middle Eastern supply disruptions and renewed attacks on Russian energy infrastructure increased uncertainty across petroleum markets.
Brent crude futures reached $109.86 per barrel during the session, while West Texas Intermediate (WTI) closed at $101.41.
The advance reflects growing concerns about the reliability of international petroleum supplies and the ability of producers to maintain deliveries through major transportation corridors.
On one had and especially for energy companies, the latest price increase creates different financial implications across the industry, particularly for upstream producers, refiners, and transportation operators.
Higher crude prices generally support revenue and operating cash flow for exploration and production companies. Producers with established production, manageable operating costs, and limited hedging exposure may benefit most directly from sustained price strength.
However, elevated commodity prices do not automatically translate into higher capital spending. Companies must evaluate whether current market conditions are likely to persist before committing additional investment to drilling programs, acquisitions, or infrastructure expansion.
The current rally is being driven partly by renewed concerns surrounding the Strait of Hormuz, where attacks on commercial shipping continue to complicate petroleum exports from the Middle East.
Attack on Saudi Arabia has raised concerns on further supply disruption and Ukrainian strikes on Russian energy infrastructure have raised additional concerns.
But for refiners, higher crude acquisition costs present a different financial challenge.
Profitability depends on whether gasoline, diesel, and other refined product prices increase sufficiently to offset more expensive feedstocks. These factors and others are key in determining domestic refined crude pricing and on country to country basis depending on downstream infrastructure availability.
Refineries with reliable operations and access to competitively priced crude may be better positioned to manage these conditions.
Midstream companies and export terminal operators could also experience changing demand as international buyers adjust crude sourcing and transportation arrangements.
Higher oil prices may support activity across producing regions, but elevated freight rates and shipping insurance costs can reduce the competitiveness of barrels delivered to distant markets.
For investors, the durability of the current rally is more important than any individual price milestone.
A sustained period of higher crude prices could strengthen producer balance sheets, support shareholder distributions, and improve the economics of selected development projects.
Conversely, a rapid improvement in regional security or transportation access could reduce the geopolitical premium embedded in current prices.
The next indicators to watch include petroleum flows through the Strait of Hormuz, Russian refinery operations, U.S. crude inventories, tanker freight rates, and changes in refining margins.
Oil’s move toward $110 underscores the importance of evaluating energy investments across the entire supply chain, where higher commodity prices can create both financial opportunities and operating challenges.
Intentional forward crude sales by Nigeria impact domestic refinery feedstock supply in several key ways, balancing guaranteed volumes against structural supply shortages and cost disputes:
Forward crude contracts including arrangements managed by the Nigerian National Petroleum Company Limited (NNPC) can help local refiners lock in future barrels and reduce immediate exposure to international price spikes.
However, much of Nigeria’s crude production has historically been pre-committed or tied to long-term forward agreements with international traders, leaving a deficit for local processors like the Dangote Refinery and modular refiners.
Because domestic crude allocations under mechanisms like the Domestic Crude Supply Obligation (DCSO) face hurdles, shortfalls force local refiners to supplement supply with imported crude or buy back Nigerian crude through international middlemen at a premium.
The Crude Oil Refiners Association of Nigeria (CORAN) supports forward sales in principle for feedstock predictability, but demands transparent pricing, equitable access for both large and modular plants, and clarity on pricing caps (such as proposed pump/gantry limits around ₦1,350 per litre).
The Association has backed the federal government’s plan to sell crude oil to domestic refineries through forward contracts but warned against imposing a petrol price ceiling without explaining how costs above the limit would be recovered.
The association said forward sales could help refiners secure feedstock and reduce exposure to volatile international oil prices but insisted that the proposed arrangement must be transparent, commercially sustainable and accessible to all local refiners.
Balancing Nigeria’s refining capacity and feedstock supply sustainability to guarantee moderate pricing stability is a big challenge because refining capacity of the country predictably overwhelms production capacity.
Dr. Charles Ebereonwu, Principal Partner, CETTLE Consulting Nigeria Limited, speaking on the issue with NATIONAL ECONOMY, however posits that currently Nigeria do not have a problem of state-owned refineries not having enough supply of crude oil. What we have is a problem of sub-optimal local refining due to the non-functional state of our public refineries.
To ramp up production, ongoing successes in pipeline protection need to be sustained, he said.
Also, continuous improvement in the fiscal and regulatory terms to encourage oil companies and investors to invest more in not just exploration, but also increased production both from new fields and the revamping of old ones. The authorities need to enforce all marginal field licenses as well as review the policy that mortgages oil production for loans to finance government expenditures.
Sola Adebawo is an energy industry executive, strategic adviser,min his opinion said
Nigeria’s refining debate has turned to a more fundamental question: can the country reliably supply the crude its refineries need, and on what terms?
He referred to On 9 October remark by Finance Minister Taiwo Oyedele, who said Nigeria did not have enough freely available crude to meet the Dangote refinery’s full requirement of 700,000 barrels per day. His point was that national production is not the same as crude the government can freely allocate. Joint-venture and production-sharing entitlements, production costs and royalties all affect the volume available to the state.
That distinction matters, said Adebawo as Oyedele was not saying Nigerian crude was unavailable for refiners to buy but the questions are how much crude is produced, who owns each portion, what is already committed, and whether local refiners can secure timely deliveries on workable commercial terms.
Our correspondent reports that the NUPRC’s Q2 2026 report complicates the picture. Producers offered Dangote Refinery 68.1 million barrels against a stated requirement of 63 million. The refinery accepted 52.6 million barrels. Separately, NUPRC reported that 53.7 million barrels of crude and condensate were supplied to all local refiners during the quarter, representing 97.4 per cent of allocated volumes.
The figures measure different things. The 97.4 per cent is performance against allocated volumes; it does not mean each refinery received all it requested. Dangote’s stated quarterly requirement works out to about 692,000 barrels per day, close to the refinery’s 700,000-barrel nameplate capacity. Its accepted supply averaged about 578,000 barrels per day over the quarter. That is an arithmetic comparison of NUPRC’s figures, not a measure of actual refinery throughput.
According to Adebawo, Chief Executive Officer of Hyphen Partners Limited, and a former executive at Chevron and Heritage Energy, said the data raise a question they do not answer: why did the refinery accept less than its stated requirement when producers had offered more? The figures cover April to June, not the current quarter, and do not say whether price, grade, timing, payment, operational planning or another factor shaped acceptance. They do not prove a continuing supply shortage. But they show why the issue cannot be reduced to whether Nigeria has oil in the ground.
Market evidence points to a mixed sourcing strategy.
Reuters reported that Dangote had bought at least 16 million barrels of Nigerian crude for October arrival, equivalent to about 520,000 barrels per day.
Its October supply programme also included two US crude cargoes.
This indicates substantial local purchases alongside imported feedstock. It does not establish why the imports were needed or whether the local offers could have met the refinery’s full operational needs.
Nigeria’s legal framework recognises both domestic supply objectives and commercial realities.
Section 109 of the Petroleum Industry Act provides for domestic crude supply obligations.
The NUPRC says the framework operates on a willing-buyer, willing-seller basis. An obligation to offer crude does not, by itself, settle the price, payment, delivery or grade terms needed to complete a transaction.
This is the coordination challenge behind Nigeria’s refining expansion.
More local refining can reduce reliance on imported petroleum products and create export opportunities. But installed capacity alone does not deliver energy security. If refiners cannot secure suitable feedstock on reliable terms, they may source crude internationally, adjust throughput or compete with exporters for available barrels.
The policy response should not begin with the assumption that crude must be sold to refiners at a discount.
That could shift costs to producers or the public, weaken export earnings or create another form of subsidy. Nor should refiners be left to navigate uncertain allocations and opaque contracting. Nigeria needs rules that make supply predictable while allowing producers to earn commercially viable returns.
There are practical steps noted Adebawo, who said Nigeria needs to raise production, because sustained output growth creates more room for exports and local refining.
The NUPRC should publish regular data showing volumes allocated, offered, accepted and delivered, with enough explanation to clarify material gaps.
Producers and refiners need bankable supply agreements, reliable payment arrangements and clear procedures for resolving disputes over pricing, quality and delivery. Where commercial confidentiality limits disclosure, the regulator can publish aggregated data without revealing contract-level details.
The trade-offs should be explicit. Diverting more crude to domestic refineries may support local processing, but it can reduce exports when global prices are high. Requiring refiners to buy at commercial prices protects the fiscal position, but exposes them to international crude prices and exchange-rate movements. Neither choice guarantees lower pump prices.
The measure of success should be more than the amount of refining capacity announced or installed.
It should be whether Nigeria can produce crude sustainably, account transparently for ownership and allocation, and deliver feedstock under terms that support investment.
Adebawo notes that the Q2 data leave a question worth answering: what happened between the barrels offered and the barrels accepted?
Until Nigeria can account clearly for those barrels, expanding refining capacity may reduce imports of finished products while leaving some refineries dependent on imported crude for part of their needs, he added.
The Nigerian Paradox
The CORAN as a reputable body of refiners interrogates supply chain issues and politics of crude availability to local refiners.
Nigeria remains one of Africa’s largest crude-oil producers yet domestic refiners can still encounter significant difficulties obtaining Nigerian crude on commercially workable terms.
This contradiction should concern every policymaker according to the Association.
Dissecting its analysis based on data, it said that during the first quarter of 2026, 61.9 million barrels were allocated to domestic refineries and producers offered 68.7 million barrels but actual deliveries, however, amounted to only 28.5 million barrels. The NUPRC identified pricing gaps between producers and domestic refiners as one of the principal reasons why crude offered did not ultimately translate into completed transactions.
There has since been encouraging improvement, noted CORAN as NUPRC reported that 53.7 million barrels of crude oil and condensate were supplied to local refineries during the second quarter of 2026, representing reported DCSO performance of 97.4 per cent. CORAN acknowledges and commends this improvement.
However, it argues that physical allocation alone does not resolve the problem as a refinery does not consume an allocation on paper but consumes crude delivered under commercially sustainable terms.
Pricing, transportation, evacuation infrastructure, crude quality, financing, payment arrangements and proximity to producing assets remain fundamental components of the crude-supply equation.
The NUPRC has acknowledged these realities and has begun consulting on mechanisms such as domestic crude swaps that could match producing assets more efficiently with nearby refiners and reduce unnecessary transportation costs.
To address the problem the CORAN strongly reiterates its support for the principle behind the Federal Government’s Naira-for-Crude initiative.
But it demanded that the policy should not merely exist in name but must become a predictable and institutionalised component of Nigeria’s domestic refining architecture.
A refinery whose principal product is sold in naira but which must repeatedly source crude through foreign-exchange-dependent arrangements suffers an avoidable currency mismatch.
Nigeria therefore needs a transparent mechanism through which qualified domestic refineries can access appropriate Nigerian crude and settle eligible domestic crude transactions in naira under clearly defined and commercially workable conditions.
The framework must also be broad enough to accommodate modular and emerging refineries rather than inadvertently creating a system accessible only to the largest operators.
Naira-for-Crude should become an industrialisation policy rather than an episodic intervention.
The CORAN also urged the government and regulators to urgently establish a commercially sensible pricing template for crude supplied to domestic refineries.
International benchmarks such as Brent, WTI and Platts are useful market references and should not, however, be applied mechanically in circumstances where doing so effectively causes Nigerian refiners to pay for logistics they themselves must separately undertake.
Many modular refineries obtain crude from producing assets and arrange evacuation from or near the wellhead.
Where an international benchmark incorporates freight, insurance or delivery economics associated with another market, charging the domestic refinery the full benchmark while simultaneously requiring it to bear its own evacuation, trucking, barging or pipeline cost risks creating an economically distorted transaction.
Recent discussions involving Nigerian regulators and refinery stakeholders have focused specifically on crude pricing and logistical adjustments for refiners located close to producing assets.
The CORAN proposes a transparent Domestic Refinery Crude Pricing Framework incorporating internationally recognised crude benchmark values; quality differentials; actual point of delivery; avoided international freight and insurance costs; domestic evacuation and logistics costs; proximity between the producing field and receiving refinery; and reasonable commercial margins for producers.
The objective is not subsidised crude but objective is correctly priced crude.
Adding Value Through Local Refining
Stakeholders have roundly rejected protruding structured petrol import.
In particular local refiners said the resurgence of petroleum product imports should also receive urgent government attention.
The NMDPRA data for July 2026 showed domestic Premium Motor Spirit (PMS), also called petrol supply falling from approximately 32.5 million litres per day in June to 25.8 million litres per day in July, while petrol imports increased from about 18.1 million litres to 19.7 million litres per day.
Nigeria certainly requires adequate petroleum-product stocks, and CORAN is not advocating policies capable of creating artificial shortages.
However, importation must increasingly serve as a supply-gap mechanism, not the default commercial architecture of the downstream petroleum sector.
A continuous import regime existing alongside substantial domestic refining investment exports Nigerian jobs and refining margins, places additional demand on foreign exchange, weakens investment incentives for existing and prospective refineries, exposes Nigeria to international freight disruptions and geopolitical shocks, and ultimately undermines the country’s aspiration to become a petroleum-product refining and export hub.
International petroleum-market disruptions have demonstrated why domestic refining capacity should be regarded as part of Nigeria’s national energy-security infrastructure.
Import licences should increasingly be calibrated against independently verified domestic production and supply gaps. Domestic production capable of meeting equivalent specifications and commercial requirements should receive priority within the Nigerian market.
Propping Domestic Refining Capacity
The refiners body notes with concern that the greatest unspoken constraint confronting Nigeria’s emerging refining industry is finance.
Refineries are extremely capital-intensive assets. Even relatively small modular refineries require substantial expenditure on process units, storage facilities, utilities, pipelines, loading facilities, environmental infrastructure, laboratories, fire-protection systems and working capital.
Yet refinery developers in Nigeria often confront short-tenor commercial loans, high domestic interest rates and limited availability of specialised energy-infrastructure financing.
A refinery project cannot reasonably be financed on the same commercial structure as ordinary short-term trading.
Government intervention does not necessarily mean writing cheques to private refinery owners, said CORAN but Intervention can take the form of creating the conditions in which long-term capital becomes available.
CORAN therefore recommends the establishment of a Refinery Development and Expansion Financing Framework, working through appropriate development-finance institutions, commercial banks, pension funds, infrastructure funds and private capital.
The framework could provide credit guarantees, refinancing windows, longer-tenor debt, construction-risk support and appropriately structured intervention funding for qualifying refinery projects.
Existing refineries seeking to add additional processing units should also qualify. This is particularly important because upgrading refinery configurations through reforming, cracking, desulphurisation and other conversion units can substantially increase Nigeria’s production of higher-value petroleum products without requiring every investor to construct an entirely new refinery.
Producing petroleum products is only half of the equation as Nigeria must also be able to move those products efficiently from refineries to consumers.
Many domestic refiners currently bear significant costs moving crude into their facilities and subsequently moving finished products out by road. That is economically inefficient.
It accelerates deterioration of Nigerian roads, increases transportation costs, increases accident risks and ultimately adds to the pump price paid by consumers.
Government should therefore urgently develop an integrated petroleum-product logistics programme incorporating strategic pipelines; coastal and inland depots; shared storage terminals; rail-linked product transportation; marine evacuation infrastructure; and open-access infrastructure capable of serving multiple refinery operators.
Private investors can build and operate much of this infrastructure. Government’s principal responsibility is to create the regulatory framework, rights of way, financing environment and investment security necessary to make those projects viable.
The CORAN advocacy is profoundly supported by Adebawo, who posits that the latest import permits and court ruling on import restrictions expose a central challenge in Nigeria’s fuel market questioning how this can support domestic refining while keeping supply secure, competition credible and consumers protected.
Adebawo, said that Nigeria’s petrol debate is often framed as a choice between local refining and imports.
“That is too simple. Heavy reliance on imports exposes the country to foreign exchange pressure, shipping disruptions and international price shocks. Heavy reliance on one refinery creates a different vulnerability: an outage, crude-supply constraint or distribution problem could affect a large share of the market.” he told our correspondent.
The question is how to reduce imports without making national supply depend on a single source, he stressed.
On 23 September, NMDPRA’s spokesperson confirmed that permits approved on 18 September covered about 830,000 tonnes of petrol imports for the fourth quarter. The permits reportedly went to six marketers. The regulator said they were intended to prevent supply gaps during the year-end period. Individual allocations were not available when the approvals were reported. The 830,000 tonnes represent approved permits, not evidence that the full volume will be imported.
In a separate case, decided five days later, a Federal High Court in Abuja ordered NMDPRA to continue granting import licences to Matrix Energy, AA Rano and AYM Shafa, provided they meet the relevant statutory and regulatory requirements. The court held that the regulator’s refusal to issue licences to those companies was inconsistent with its obligations under the Petroleum Industry Act (PIA), including its duty to promote competition. This was not a blanket licence for every importer.
At publication on 5 October, Dangote Refinery’s separate challenge to the continued issuance of import licences was scheduled for hearing on 7 October. The hearing may clarify the legal dispute, but the wider policy question remains: how can Nigeria reduce imports without making domestic supply depend too heavily on one refinery?
Section 317 of the PIA provides for imports when local refineries cannot meet domestic demand and sets out which companies may be considered for licences. The design supports domestic refining while preserving a route to imported supply when there is a shortfall. The law does not require Nigeria to choose between local refining and a competitive market. (Petroleum Industry Act, 2021)
According to Adebawo, The market data show why that balance matters. In August, petrol receipts averaged 50.5 million litres per day: 35.9 million litres from domestic sources and 14.6 million from imports. In July, domestic receipts were lower, at 25.8 million litres per day, while imports averaged 19.7 million. The supply mix can shift quickly. In August, Dangote Refinery supplied about 35.87 million litres per day to the domestic market, roughly 71 per cent of total petrol receipts that month. That is a major contribution, but it also shows how concentrated domestic supply was in one refinery.
The same August data report consumption of 41.5 million litres per day, measured by volumes trucked into the domestic market, and stock sufficiency of 22.9 days. Those figures provide context for reported receipts of 50.5 million litres per day. But they describe August, not expected demand, stock levels or supply risks in the fourth quarter. They cannot, by themselves, confirm or disprove NMDPRA’s stated reason for approving Q4 permits.
The August figures also show Dangote exporting an average of 9.73 million litres of petrol per day and ending the month with 360.4 million litres in stock, while Nigeria imported petrol. That coexistence does not prove imports were unnecessary. Timing, inventory, distribution, product requirements and commercial arrangements may all matter. The reported data do not establish which factors explain the pattern, so it is a question to examine, not evidence of misconduct or a settled case against imports.
The importers’ case also has a serious supply-security argument.
In its court filing, NNPC warned that restricting imports could expose Nigeria to supply disruptions and price instability. It also argued that Dangote had not provided independently verifiable evidence that the refinery could reliably meet the country’s total fuel demand. That is NNPC’s position in litigation, not an established finding. Still, it points to a real distinction: refinery capacity is not the same as dependable nationwide delivery, according to Reuters.
Adebawo, notes, “Imports are not a cure-all. They expose the market to foreign exchange costs, international product prices, freight and port logistics. Import permits alone do not guarantee lower pump prices. But removing import options when local supply is insufficient could reduce competitive pressure and leave consumers with fewer alternatives.”
He said the practical test is whether the permit decision fits the supply outlook for the period it covers, adding, “That means considering expected demand, refinery deliveries, stocks, planned maintenance, imports already in transit, regional availability and product quality. Approved volumes should also be distinguished from volumes actually landed. The August figures matter, but they should not be mistaken for a complete forecast of the fourth quarter.”
He went to say, “Competition requires similar care. A competitive market is not simply one with many import licences. It needs clear eligibility rules, credible quality enforcement and safeguards against any operator using market power to disadvantage rivals or consumers. The Abuja court’s emphasis on the regulator’s duty to promote competition under the PIA and the Federal Competition and Consumer Protection Act is relevant. Domestic refining should expand without qualified competitors being shut out through arbitrary decisions. (Premium Times’ report on the ruling”
He argued however that if domestic refining is to replace imports sustainably, it needs reliable crude supply, predictable access to logistics and the ability to compete on price and product quality. If importers remain part of the supply system, their licences should operate under rules that support security of supply rather than avoidable dependence on foreign products. Neither side should be protected from competition at the consumer’s expense.
Nigeria can reduce petrol imports, he said stressing that the August data show that local supply can lead the market, but also that Dangote alone supplied about 71 per cent of total petrol receipts that month. Import reduction should be a result of reliable domestic output, not an end in itself. The goal is not to replace dependence on foreign suppliers with dependence on one domestic supplier. It is to build a market where local refineries lead, imports cover demonstrable gaps and clear rules protect consumers from both shortages and excessive concentration.
Local Refining Not Cheap Fuel Guarantee
Meanwhile stakeholders and operators in Nigeria’s midstream oil and gas sector have dismissed suggestions that petrol prices should crash simply because local refining has become more efficient, insisting that the country’s rising export of refined petrol is beneficial to the economy and is not responsible for the high pump prices being experienced by consumers.
They also maintained that there is no empirical evidence to support claims that Nigeria is either importing refined petrol unnecessarily or that there is sufficient justification to question the rationale for exporting the product, even as recent statistics show that the country earned N998.50 billion from the export of Premium Motor Spirit (PMS) in the first six months of 2026.
Data from the National Bureau of Statistics (NBS) indicated that petrol export earnings in the period under review surged more than sixfold compared with the corresponding period of the previous year, with African countries accounting for N621.72 billion of the total earnings.
Chairman of Integrated Oil & Gas Ltd, Capt. Emmanuel Iheanacho, which operates ocean-going tanker vessels, said accurate data would be required to determine actual production levels and domestic demand before any decision on export could be properly justified.
Iheanacho, Nigeria’s former minister of Interior, suggested that the fluctuating prices of petrol and complaints by Nigerians that the product is still selling above their expectations could be linked to higher exports contributing, in the aggregate, to supply-level disruptions, thus keeping prices at their present levels.
He, however, noted that the Dangote Refinery is in a better position to provide adequate supply information alongside the regulatory authorities.
In his own view, the executive secretary of the Major Energies Marketing Association of Nigeria (MEMAN), Clement Isong, posited that the government should be realising more revenue through enhanced export of refined petroleum products, and that such income should be channelled towards providing the necessary infrastructure to grow the economy.
“I think the export volume is good for the economy because government would have more revenue flow and my advice is that such income be judiciously administered, especially now that emphasis is placed on expanding the Compressed Natural Gas (CNG) as a viable alternative to petrol to reduce cost of transportation,” Isong said.
The development marks a significant shift for Nigeria, which for decades depended heavily on imported refined petroleum products despite being a major crude oil producer.
However, the rise in petrol exports has coincided with increasing prices in the domestic market, with recent reports showing filling stations adjusting their prices following the Dangote Refinery’s latest gantry-price increase.
Reuters reported that the latest price increases occurred despite the Dangote Refinery operating at full capacity, with the impact being particularly severe on motorists and commercial transport operators.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), on its part, called for an open and competitive petroleum products market, saying this would promote affordable pricing and transparency in the downstream petroleum sector.
The call comes as the price of petrol continues to swing higher than expected, further creating more hardship for citizens.
National president of PETROAN, Dr Billy Gillis-Harry, specifically stated the need to develop a Petroleum Quality Assurance and Quality Control and Price Intelligence System, which he said would track product volumes, quality and prices across the downstream sector.
According to him, the system would enable retailers to monitor the quantity and quality of products loaded, while also providing information on the source and landing costs of products, thereby improving transparency.
Gillis-Harry commended the Dangote Petroleum Refinery for its investment in the sector, but said other refiners and product suppliers should be allowed to participate in the market.
“Nigeria cannot afford a situation where one company controls the supply of petroleum products,” he said, stressing the need to encourage investments in other refineries to expand domestic refining capacity.
Gillis-Harry cited the planned 25,000 barrels-per-day Azikel Refinery in Bayelsa as one of the emerging projects that could contribute to the country’s domestic refining capacity.
He said competition among refineries and product suppliers would promote market-based pricing and give consumers access to affordable petroleum products.
Iheanacho and Isong noted that Nigeria’s petroleum market has changed dramatically with the emergence of the Dangote Refinery, which has reduced the country’s dependence on imported refined products and is now operating above its original 650,000-barrel-per-day design capacity.
The duo however, argued while speaking with our correspondent that local refining does not automatically mean cheap petrol, because there are some other associated factors in the refining process.
They explained that crude has to be extracted, transported, processed and refined before products such as petrol, diesel, aviation fuel and kerosene can be obtained.
Refining crude locally removes one problem but not every cost, because for years, Nigeria exported crude and imported much of its petrol because its state-owned refineries were unable to meet domestic demand.
That meant Nigeria was paying for imported refined products, shipping, insurance, foreign exchange and other associated costs.
However, Dangote Refinery has changed that equation by allowing a much larger share of Nigeria’s fuel requirements to be supplied from within the country.
The refinery supplied nearly 80 per cent of domestic petrol demand in April 2026, according to an EIU assessment cited by Dangote Industries.
Others have also argued that even if a Nigerian refinery buys Nigerian crude, that crude is not free because oil is an internationally traded commodity, and its value is influenced by global oil prices.
So a refinery cannot simply treat locally produced crude as having zero cost because it came from Nigeria, and the international oil market remains a major factor.
When global crude prices rise, the value of the crude going into refineries rises as well, and that can eventually feed into the price of refined products.
They said that refining is a business, not a giveaway, and a refinery has enormous costs to recover, including the cost of crude, financing, maintenance, electricity and other operational expenses, logistics, storage and distribution.
The refinery also has to remain commercially viable.
So the fact that a product is refined locally does not mean the refinery must sell it below its economic cost.
For marketers, getting the petrol from a refinery to a filling station is another part of the price chain.
Fuel has to be stored, transported and distributed across a country as large as Nigeria, and those logistics costs eventually form part of what motorists pay at the pump.
The price at the refinery is not necessarily the pump price because there is an important difference between the gantry price and the price motorists see at filling stations.
A refinery can sell petrol to a customer at its loading point, but the product still has to move through the distribution chain before reaching consumers.
This explains why pump prices can differ from one location or station to another.
