Dangote Refinery: ‘We Pay Full Global Price for Nigerian Crude – No Discounts’

Dangote Petroleum Refinery has said it is not receiving Nigerian crude oil at discounted rates under the federal government’s crude‑for‑naira arrangement, stressing that it pays international benchmark prices like any other buyer in the global market.

Managing Director/CEO David Bird made this known during a media chat where he outlined how the refinery is navigating a period of extreme volatility in global oil markets while committing to meeting Nigeria’s fuel demand.

Bird said domestic refining remains Nigeria’s strongest safeguard against fuel shortages and long queues at filling stations, especially as global supply chains come under pressure.

“Domestic refining gives Nigeria supply security,” he said. “Even when global markets are disrupted, we are positioned to keep supplying the country.”

He clarified that the crude-for-naira framework does not equate to cheap feedstock for the 650,000 barrel‑per‑day plant. “We purchase Nigerian crude at international benchmark prices. There are no discounts. The refinery is fully exposed to the global commodity markets,” Bird stated.

According to him, the current oil crisis has hit import‑dependent countries hardest, with many facing sharp price spikes and supply disruptions. This, he argued, underscores the strategic importance of large‑scale domestic refining capacity.

Bird noted that crude prices have swung dramatically in recent days, rising from the mid‑$60 per barrel range to nearly $120 per barrel within about a week. “We are exposed not only to crude prices, but also to freight, insurance and financing costs,” he said.

Freight costs, in particular, have surged. Bird revealed that the cost of hiring tankers has jumped from about $800,000 per shipment to roughly $3.5 million in the current market environment, adding further pressure on refining margins.

Despite the turbulence, Dangote Refinery is operating at its full nameplate capacity of about 650,000 barrels per day and has the potential to increase production to around 700,000 barrels per day as operations are optimised.

Bird reiterated that this capacity, combined with the refinery’s focus on the domestic market, will help shield Nigeria from the worst effects of the global oil supply crisis.