Petrol Prices in Nigeria Rise, Not Refining Capacity Alone to Blame

You may have noticed that the price at the petrol pump has been on the rise lately, and it's not just about the cost of refining fuel locally. In fact, an investigation by The Punch reveals that competition and market forces, rather than refining capacity alone, are largely driving up petrol prices in Nigeria.

The Dangote Petroleum Refinery was meant to reverse the country's reliance on imported refined petroleum products and lower fuel prices. However, the evidence suggests that this has yet to materialise. According to the National Bureau of Statistics, the average retail price of petrol rose by N565.54 per litre from N1,030.46 in September 2024 to N1,596.00 in May 2026.

Dangote Refinery, which began selling petrol in September 2024, has reportedly refined about 700,000 barrels daily, with plans to expand capacity to 1.4 million barrels per day within three years. However, the findings of the investigation reveal a market far more competitive than widely assumed. Using spot landing costs, Dangote's gantry price exceeded imported petrol in several instances.

The investigation, which compiled and analysed gantry prices announced by Dangote Refinery alongside imported petrol landing costs published in the Major Energies Marketers Association of Nigeria's Competency Centre Energy Bulletin, found that prices rose in response to international crude oil movements, exchange rate fluctuations, and import parity rather than local refining costs.

Aliko Dangote, the founder of Dangote Petroleum Refinery, has repeatedly argued that entrenched interests have resisted the emergence of domestic refining. Speaking in Lagos on September 15, 2025, he described the refinery's first year of petrol production as a difficult battle against operators who benefited from the old import-dependent system.

"The past year has been a very rough journey, I must confess. It wasn’t easy because we came in to change the narratives. We came in to change the system of how things have been done in the downstream. We have people who are used to rent collection. We have people who believe we have taken food from their tables," Dangote said.

The investigation suggests that the market for petrol in Nigeria is far more complex than previously thought, and that refining capacity alone is not the main driver of petrol prices.

The story of the Dangote Petroleum Refinery is one of unfulfilled promise and complex market forces. While the refinery has expanded domestic supply, the promise of cheaper petrol has yet to materialise.