Dangote's Petrol Price Hikes Stir Debate Over Crude Cost Explanation

Dangote Petroleum Refinery's recent petrol price increases have sparked questions about its explanation that the adjustments reflect the cost of crude oil purchased weeks earlier. Analysts say the timing and size of the hikes do not fully match the stated rationale.

The refinery raised its ex-gantry Premium Motor Spirit price three times between August 21 and 29, from ₦1,165 to ₦1,185, then ₦1,200 and finally ₦1,265 per litre. Brent crude fell by nearly 10% during part of the same period.

Dangote maintains its pricing reflects crude already purchased and delivered for processing, not prevailing international prices. NNPC subsequently raised its own petrol prices in Abuja and Lagos.

Analysts say greater disclosure of crude purchase costs could help explain future price adjustments. David Precious, Senior Market Analyst at EBC Financial Group, said an explanation based on stored crude costs would normally be expected to correspond with the timing and size of the underlying cost changes.