Oil and gas expert Henry Adigun has projected that the Dangote Refinery in Lagos may not sell Premium Motor Spirit (PMS) below ₦850 per litre, citing the dollar-denominated costs of production. Adigun, speaking on Channels Television’s Inside Sources with Laolu Akande, explained that despite the refinery’s state-of-the-art production, market forces and operational costs would dictate the price.
Adigun noted that the petrol produced at the Dangote Refinery is of premium quality, which commands higher pricing. “The better the quality, the more the pricing,” he stated, adding that the fuel business operates in US dollars, giving refinery owner Aliko Dangote the right to set competitive prices.
“He [Dangote] incurs costs. He receives only 40% of his crude from NNPC and has to purchase the rest from international markets like the US. Additionally, Nigerian crude needs to be blended with foreign crude for optimal production, further impacting costs,” Adigun explained.
Addressing the speculation that Dangote might sell petrol at ₦700, Adigun dismissed the possibility, stating that his calculations showed prices wouldn’t fall below ₦850 per litre. “There’s also the retail cost to consider,” he added.
Nigeria has been facing persistent fuel supply challenges, with all state-owned refineries non-operational, making the country dependent on imported refined petroleum products. Prices at NNPCL outlets have surged since the removal of fuel subsidies in May 2023, tripling from around ₦200/litre to about ₦800/litre.
The Dangote Refinery, valued at $20 billion, began operations in late 2023, producing diesel, aviation fuel, and now petrol, with hopes of reaching its full capacity of 650,000 barrels per day by year-end. NNPCL recently announced plans to start lifting fuel from the refinery by mid-September.
