Dangote Petroleum Refinery spent more than $4.48 billion buying crude oil over two months, the company revealed on Monday. The massive feedstock costs explain why petrol prices at home don't immediately drop when international crude prices fall, the refinery said.
The 650,000 barrels-per-day facility has cut its ex-depot petrol price four times in one month. Each reduction reflected the gradual swap of pricey crude stockpiles for cheaper batches rather than daily shifts in Brent prices, it explained.
In a rare move, Dangote published detailed records of every crude cargo it received in May and June. The transparency push included shipment volumes, grades purchased and exact landed costs for each delivery.
May proved especially costly. The refinery took delivery of 24 cargoes totalling 21.47 million barrels that month at a landed cost of $2.68 billion, meaning each barrel cost an average of $124.80.
June brought relief. Dangote imported 18.93 million barrels across 21 cargoes worth $1.80 billion, cutting the average landed cost to $95.25 per barrel.
Together, both months cost the refinery about $4.48 billion in crude purchases. This happened even as Brent crude has since fallen to around $71 per barrel.
Public pressure on fuel prices has intensified recently. Nigerians expected petrol prices to drop sharply after geopolitical tensions eased and global oil markets weakened, but that didn't happen as quickly as many hoped.
The Federal Competition and Consumer Protection Commission (FCCPC) voiced alarm last weekend over what it called possible consumer exploitation in Nigeria's downstream petroleum sector. The regulator found that fuel prices hadn't fallen enough despite the recent drop in global crude costs.
According to the FCCPC's surveillance of the downstream market, local refiners, depot operators, marketers and filling station operators made only token price cuts. These reductions didn't match the decline in international crude oil prices, the commission said.
Ondaje Ijagwu, the FCCPC's Director of Corporate Affairs, issued a statement on Sunday noting the problem. A review of gantry and retail prices showed consumers hadn't fully benefited from the improvement in global oil costs, he noted.
"The Federal Competition and Consumer Protection Commission has expressed concern over findings from an ongoing surveillance of the downstream petroleum market, suggesting undue exploitation of consumers," the statement read.
The FCCPC added: "A review of the gantry prices of local refiners, marketers, depot operators, and retail outlet operators revealed token reductions in prices that are not commensurate with the fall in crude prices in the global market."
Dangote pushed back against those expectations. The company said such views ignore the commercial realities of how refineries operate.
"It is important to clarify that refinery pricing does not move in tandem with daily international crude oil quotations," Dangote said in a response. Crude oil procurement happens weeks or months before processing occurs, under commercial contracts tied mainly to monthly average pricing mechanisms rather than spot market prices, the refinery explained.
