Dangote Refinery explains hike in petrol cost as pump price nears N1,400
The Dangote Petroleum Refinery has explained its recent increases in the price of petrol, attributing the adjustments to the cost of crude oil purchased earlier and the time required to transport and process the commodity.
The development has pushed the retail price of Premium Motor Spirit (PMS) to between N1,310 and N1,400 per litre in different parts of the country.
While petrol is reportedly selling for about N1,310 per litre in Lagos and Ogun states, prices have risen to N1,350 and above in some northern states and other locations farther from the refinery.
The refinery increased its gantry price three times within eight days, raising it from N1,165 per litre on August 21 to N1,265 on August 29. The N100 increase represents an 8.6 per cent rise.
A senior executive of the refinery explained that movements in international crude prices do not immediately translate into changes in domestic petrol prices because of the gap between when crude is purchased and when it arrives for processing.
“Large volumes of crude bought at higher prices remain in storage. Selling petrol based on today’s cheaper crude would mean losses on inventory acquired at higher costs,” the official said.
The price increases have, however, raised concerns among petroleum marketers, with the Independent Petroleum Marketers Association of Nigeria (IPMAN) warning that fluctuations in crude prices and geopolitical tensions, particularly between the United States and Iran, were making business planning increasingly difficult.
IPMAN spokesperson Chinedu Ukadike said Dangote Refinery had on previous occasions adjusted its prices in response to global market trends, but noted that the latest increases were putting additional pressure on marketers and consumers.
