The Managing Director of Dangote Refinery, David Bird, has urged the Nigerian government to prioritise domestic refineries in the allocation of crude oil, warning that failure to do so could continue to push up the pump price of petrol across the country.
Speaking at a press conference in Lagos on March 9, Bird attributed the recent increase in petrol prices partly to global supply disruptions caused by the ongoing conflict in the Gulf region, which has prompted several countries to restrict fuel exports in order to protect their domestic markets.
According to him, nations with refining capacity are increasingly adopting protectionist policies by prioritising their local industries over foreign buyers.
“Many countries with a refining industry have banned exports. They are protecting their domestic markets and ensuring their refineries have enough crude supply. Nigeria should also be considering such a strategy in the interest of its economy,” Bird said.
Bird stressed that Nigeria must ensure that local refineries receive crude oil supplies ahead of international traders, arguing that domestic producers should not be treated as “customers of last resort.”
He expressed frustration that crude grades requested by the refinery are sometimes sold to foreign traders who later resell them to Nigerian refiners at higher prices.
“We put forward requests for several crude grades such as Bonny Light and Escravos, yet we find those same grades being sold to international traders who then sell them back to us. That increases costs unnecessarily,” he said.
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The Dangote Refinery chief called for greater transparency in the allocation process managed by the Nigerian National Petroleum Company Limited, particularly under the government’s crude-for-naira supply arrangement designed to support domestic refining.
“Domestic refining should be prioritised before crude is allocated to international traders in places like Geneva who then add their margins and sell it back to Nigerian refiners,” Bird added.
Beyond crude supply challenges, Bird also raised concerns about the large number of government agencies involved in regulating the oil and gas sector.
According to him, about 47 regulatory bodies currently oversee various aspects of refining and logistics, including the Nigerian Ports Authority and the Nigerian Maritime Administration and Safety Agency.
He noted that the multiple layers of regulation increase operational costs, which ultimately affect fuel prices paid by consumers.
“Every agency adds some form of cost in the value chain. Those costs eventually get passed down to the final consumer, which contributes to higher pump prices,” he said.
Bird therefore called for a review of regulatory processes to eliminate overlapping mandates and reduce administrative expenses in the supply chain.
Energy analysts say Bird’s comments highlight structural challenges affecting Nigeria’s downstream petroleum sector.
Oil and gas expert Dr. Kelvin Emmanuel said prioritising domestic refineries for crude supply could significantly reduce Nigeria’s dependence on imported refined products and stabilise fuel prices.
“If local refineries get steady crude supply at competitive rates, it reduces import costs and exposure to international price volatility,” he said.
Similarly, energy economist Dr. Ayodele Oni noted that excessive regulatory oversight can raise production costs across the industry.
“When dozens of agencies impose separate charges or compliance requirements, it increases operational expenses. These costs eventually reflect in the pump price of petrol,” he explained.
Analysts also point to geopolitical tensions in the Middle East as a major factor influencing global oil markets and fuel supply chains.
Countries with refining capacity are increasingly prioritising domestic consumption by restricting exports or releasing strategic reserves for local industries.
Observers say Nigeria could adopt a similar strategy by strengthening policies that support domestic refining, especially as new facilities such as the Dangote Refinery seek stable crude supply to operate at full capacity.