Fresh details have emerged on why petrol and diesel prices in Nigeria have not risen as sharply as expected despite the recent global increase in crude oil prices. A senior management official of the Dangote Group has disclosed that the Dangote Petroleum Refinery has been absorbing part of the cost of petrol and diesel supplied to the Nigerian market, but is unable to do the same for aviation fuel.
The official, who spoke on condition of anonymity because he was not authorised to speak publicly, explained that the refinery has been trying to reduce the burden on consumers by keeping petrol and diesel prices lower than prevailing market realities.
According to the source, the refinery’s ex-depot petrol price of N1,200 per litre is below what it should ordinarily be, considering the sharp rise in crude oil prices in the international market.
The official said the recent conflict involving the United States and Iran had serious consequences for the global oil market. Tension in the Middle East worsened after Iran blocked the Strait of Hormuz, one of the world’s most important shipping routes for crude oil. The development disrupted supply fears and pushed up crude prices sharply.
Brent crude, the international benchmark used to measure oil prices, reportedly rose from about $66 per barrel on February 28 to above $100 per barrel after the crisis escalated.
This sudden rise naturally affected refined petroleum products such as petrol, diesel and aviation fuel. In response, Dangote Refinery adjusted its petrol gantry price from N774 per litre to N1,200 per litre. However, insiders say even the new price does not fully reflect the actual market cost.
The source explained that the refinery has deliberately tried to cushion the impact of rising prices on Nigerians by limiting increases in petrol and diesel.
He said the company had “optimised” the prices of Premium Motor Spirit, also known as petrol, and Automotive Gas Oil, known as diesel, to help the public.
When asked if the word “optimised” meant subsidy, the official reportedly answered in the affirmative, confirming that the company was absorbing part of the cost.
This means Dangote Refinery is effectively selling petrol and diesel below what market conditions would normally dictate, in a move aimed at easing pressure on households, transporters and businesses.
However, the company said it cannot extend the same support to every petroleum product.
The source made it clear that aviation fuel, also known as Jet A-1, is being sold strictly at market price because subsidising petrol, diesel and jet fuel at the same time would be unsustainable.
He stated that the refinery could not afford to subsidise everything, especially in a period of rising crude costs.
The decision has left Nigeria’s aviation sector under serious pressure, as airlines continue to battle the rising cost of Jet A-1.
Airline operators say the product sold for around N900 per litre before the Middle East crisis, but prices have since surged to between N2,700 and N2,900 per litre. In some cases, marketers were said to be charging as high as N3,500 per litre.
The Vice President of the Airline Operators of Nigeria, Allen Onyema, recently warned that the cost increase was threatening the survival of domestic airlines.
According to industry figures, Dangote Refinery currently supplies more than 90 per cent of Nigeria’s aviation fuel demand, making it a major player in the sector.
Another Dangote official said the refinery sells jet fuel to marketers at less than N2,000 per litre. He disclosed that the price as of Monday morning was N1,799 per litre, adding that it had been even lower earlier.
A recent report by the Major Energies Marketers Association of Nigeria placed Dangote’s jet fuel gantry price at N1,732 per litre, while imported aviation fuel stood at N1,835 per litre.
Despite this, marketers have largely remained silent on the exact prices they sell to airlines.
Earlier this month, the Airline Operators of Nigeria wrote to the Major Energies Marketers Association complaining that the price of Jet A-1 had become unbearable.
In the letter, signed by the association’s President, Abdulmunaf Sarina, the airlines stated that the rise from N900 per litre to N3,300 per litre represented more than a 300 per cent increase.
The operators argued that such a sharp increase was not in line with global crude oil movements, which they estimated had risen by around 30 per cent over the same period.
They said airlines had continued operations out of patriotism and service to the nation, but warned that the situation had become unsustainable.
The association urged marketers to adjust aviation fuel prices fairly in line with international realities, stressing that airlines could no longer cope with the high costs.
In response, marketers blamed global supply disruptions and geopolitical tensions in the Middle East for the rising prices.
They also questioned the N3,300 per litre figure quoted by the airlines, saying their internal market checks showed lower average prices.
The marketers insisted they could not publicly agree on prices because doing so would violate competition laws, but encouraged airlines being charged excessive rates to seek cheaper alternative suppliers.
Since April 16, however, the situation has shown little improvement, with many airlines still warning of possible shutdowns if the high cost of fuel continues.
The latest revelation means that while motorists, transport companies and industries are getting some relief through lower petrol and diesel prices, the aviation industry remains exposed to harsh market forces.
For many Nigerians, it also raises fresh debate about the role of private refiners in cushioning the economy during times of global crisis, and whether similar relief can eventually be extended to other sectors heavily dependent on fuel.
