Dependence on coastal logistics may push petrol pump price to N1,000/litre – Dangote refinery

Dangote refinery says dependence on coastal logistics may push petrol pump price to N1,000 per litre.

Coastal logistics involves transporting and distributing goods — such as petroleum products — by ship along the coastline, rather than using pipelines or land-based methods.

The refinery said marketers are free to choose their preferred mode of evacuation, but warned that coastal logistics could add an additional annual cost of about N1.75 trillion.

“… reliance on coastal delivery, particularly within Lagos, may introduce avoidable costs with material implications for fuel pricing, consumer welfare and overall economic wellbeing,” the refinery said in a statement on Thursday.

“In our opinion, coastal logistics can add approximately N75 per litre to the cost of petrol, which, if passed on to consumers, would push the pump price of PMS close to N1,000 per litre.”

Based on Nigeria’s average daily consumption of about 50 million litres of petrol and 14 million litres of diesel, the refinery “estimated that sustained dependence on coastal logistics could impose an additional annual cost of roughly N1.752 trillion”.

This cost, the plant said, would ultimately be passed on to either producers or consumers.

Reaffirming its commitment to supplying high-quality petroleum products at competitive prices, the company urged marketers and policymakers to adopt logistics options that promote price stability and protect consumer welfare.

The company said its position is supported by sustained investment in critical infrastructure, including a world-class gantry facility with 91 loading bays capable of dispatching up to 2,900 tankers daily.

“Operating on a 24-hour basis, the facility can evacuate over 50 million litres of Premium Motor Spirit PMS, 14 million litres of Automotive Gas Oil (diesel) and other refined products each day,” the statement reads.

“While the refinery remains open to coastal loading where logistics make it necessary, …gantry loading remains the most economically efficient and operationally effective option.”

According to the refinery, direct gantry evacuation eliminates port charges, maritime levies, and vessel-related costs that add no value to end users, helping to reduce costs, improve distribution efficiency, and support price stability.

The refinery also renewed calls for coordinated investment in pipeline infrastructure across the country.

Addressing claims that it imports finished petroleum products, Dangote refinery denied the allegations, describing them as misleading.

The plant explained that while its residue fluid catalytic cracking unit is currently undergoing maintenance, it only “imports intermediate feedstock in line with global industry practice”.

The refinery challenged anyone with credible evidence of finished-product imports to present it to the relevant regulatory authorities, adding that such claims are often driven by interests seeking to justify continued dependence on fuel imports.

“Since commencement of operations, the price of diesel has fallen from about N1,700 per litre to N1,100 and currently trades between N980 and N990. Similarly, PMS prices have declined from about N1,250 per litre to between N839 and N900,” the plant said.

Dangote refinery added that increased domestic supply has lowered fuel imports, eased foreign exchange (FX) pressure, and boosted market stability, supporting a stronger naira at about N1,385 per dollar.