Dangote Refinery Defends Fuel Price Hikes Amid Volatility
The price of petrol in Nigeria has reached as high as N1,400 per litre due to recent increases by Dangote Petroleum Refinery. The refinery's latest hike of N65 per litre, from N1,200 to N1,265, is the third adjustment in eight days and has raised concerns among petroleum marketers.
A senior executive at Dangote Refinery attributed the price hikes to the cost of crude oil purchased earlier and the lengthy process involved in securing, shipping, and delivering crude to the refinery. The executive explained that there is a significant time lag between when crude was purchased and when it arrives at the refinery for processing.
The refineries' inventory also plays a role, with large quantities of expensive crude remaining in storage. Reducing the price of petrol immediately whenever international crude benchmarks fall could mean selling products made from expensive inventory at a cheaper replacement cost.