Dangote Petroleum Refinery warns that continued use of coastal logistics for distributing petrol could sharply raise pump prices if those costs reach consumers. The refinery issued this stark outlook in a public statement on Thursday.
“Coastal logistics can add about N75 per litre to petrol costs, potentially pushing pump prices close to N1,000 per litre if passed on to consumers.” This is the company’s core concern. The extra cost arises from maritime levies, port charges and vessel-related expenses that do not occur when products leave by truck from refinery gantries.
Nigeria’s average daily demand runs around 50 million litres of petrol and 14 million litres of diesel. Heavy reliance on coastal logistics could impose additional annual expenses of about N1.75 trillion. The refinery states these expenses will fall on either marketers or end users, undermining price stability.
Dangote framed the issue as one of logistics efficiency. The firm contrasts two evacuation methods: coastal shipment and direct gantry loading. Gantry loading uses the company’s 91-bay infrastructure to dispatch tankers by land. This approach, the refinery maintains, cuts out charges that do not benefit consumers.
“Marketers are free to choose between gantry and coastal loading, and the refinery does not impose restrictions on evacuation modes,” the refinery clarified. Nonetheless, the cost implications of the chosen method are material. Over time, an avoidable cost burden could erode pricing gains generated by increased local refining capacity.
Dangote also urged policymakers and marketers to prioritise logistics strategies that support price stability and protect consumer welfare. Nigeria’s downstream sector has already experienced price compression following the launch of domestic refining capacity. But the refinery argues that inefficient evacuation strategies risk reversing these gains.
The refinery’s warning comes amid broader efforts to stabilise fuel prices through increased domestic supply. Local refining has helped shift Nigeria away from imported finished petroleum products, which historically exposed the economy to foreign exchange pressure and global market volatility. The Dangote facility plays a central role in this shift.
Domestic supply has lowered certain fuel prices. Diesel prices have fallen from around N1,700 to between about N980 and N990 per litre. Petrol prices dropped from approximately N1,250 to a range between N839 and N900 per litre. These outcomes demonstrate the impact of local refining on retail pricing.
Despite these improvements, the refinery stresses that the distribution network remains a weak link. Without complementary investments in efficient evacuation infrastructure, such as expanded pipeline networks, the cost benefits of local refining may not fully materialise.
The firm specifically pointed to pipeline infrastructure as a structural solution. Pipelines would remove layers of cost associated with marine transport and reduce dependence on coastal logistics. Over time, such investments could strengthen fuel supply reliability and reduce the cost carried by consumers.
In summary, Dangote’s analysis shows that logistics decisions now directly shape fuel pricing outcomes. If avoidable cost layers from coastal transport are passed through the supply chain, petrol prices could approach N1,000 per litre. The refinery’s statement underscores the need for more cost-efficient distribution choices to maintain gains achieved from local refining capacity.
