The Nigerian 650 Barrels per day Dangote Refinery, built by Africa’s richest man, Alhaji Aliko Dangote, has revealed that the prevailing global crude oil glut, which is being emasculated by the Israel-US war on Iran that sent crude oil price to all time high at $120 per barrel is also impacted a corresponding effect to its operations.
The Managing Director/CEO of Dangote Petroleum Refinery, David Bird, made this startling revelation in a media chat with some selected media houses in his office, reiterating with facts that the current global oil glut will not deter Dangote Refinery from meeting Nigeria’s fuel demand supply chain, as the company has enough storage of refined products in stock.
According to the company’s official social media handle, Mr. Bird’s vital key points were anchored to the facts that Dangote Refinery will provide Nigeria with supply security to helping the country avoid fuel shortages and queues even when global markets are disrupted.
He further emphasized that even under the crude-for-naira arrangement, Nigerian crude is purchased at international benchmark prices, meaning the refinery does not receive discounted crude. He noted that the import-dependent countries are worst hit as the global oil crisis escalates.
Global oil markets are experiencing extreme volatility, with crude prices rising from the mid-$60 range to nearly $120 per barrel within a week, before easing between $80 -$ 90 after President Donald Trump made a definitive statement that the end of the war in Iran is in sight.
“Dangote Refinery is fully exposed to international commodity markets, including crude oil prices, freight rates, insurance, and financing costs. Freight costs have surged upward, with tanker costs rising from about $800,000 to roughly $3.5 million per shipment in the current market environment. Dangote Refinery operates at its full nameplate capacity of about 650,000 barrels per day, with the potential to increase production to around 700,000 barrels per day,” The company has stated.
Nigerians are currently having a toll of the hike in the global crude oil price as the cost of Petroleum Motor Spirit, popularly called fuel or petrol, which was sold at N930 before the Israel-US war on Iran, which commenced on February 28, is now sold at N1,300 in some filling stations, leading to an increase of about 40%.
