Marketers face higher costs as Dangote Refinery raises diesel price to N1,650

Dangote Petroleum Refinery has resumed the sale of Automotive Gas Oil (AGO), popularly known as diesel, after an eight-day suspension, but marketers will now pay significantly more for the product following a fresh upward review of the refinery’s gantry price.

The refinery has increased its ex-depot loading price for diesel from N1,500 to N1,650 per litre, representing a N150 increase, or 10 per cent, according to industry data.

The revised price took immediate effect as the refinery reopened diesel loading to marketers across the country after temporarily halting supplies for more than a week.

Suspension Tightened Domestic Supply

The resumption comes after an eight-day disruption in diesel loading that affected supply across the domestic market and forced many independent marketers to procure products from private depots at considerably higher prices.

The temporary suspension was linked to changes in the refinery’s marketing framework, a move that constrained diesel availability and contributed to higher distribution costs nationwide.

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During the suspension, marketers and bulk buyers turned to alternative suppliers, leading to increased depot prices and concerns over supply stability in key commercial centres.

Rising Crude Prices Drive Increase

Industry stakeholders attributed the latest price adjustment to rising replacement costs driven by the sustained increase in international crude oil prices.

Global oil markets have remained volatile amid renewed geopolitical tensions in the Middle East, pushing up the cost of crude oil procurement for refiners around the world.

As of Friday afternoon, Brent crude traded at $97.76 per barrel, while West Texas Intermediate (WTI) stood at $89.87 per barrel.

Although benchmark crude prices have eased slightly from recent highs, analysts say geopolitical uncertainties continue to support elevated energy prices, increasing production costs for refiners.

According to market experts, disruptions to major shipping routes, rising freight costs and higher marine insurance premiums have combined to increase the overall cost of importing crude oil and distributing refined petroleum products globally.

READ ALSO: Dangote Refinery resumes petrol sales in naira, raises ex-depot price to ₦1,215 per litre

These developments have had a direct impact on production economics at the Dangote Refinery, whose replacement costs are closely linked to movements in international crude price

Fresh Price Adjustments Expected

Industry operators expect the new gantry price to trigger another round of increases in ex-depot diesel prices across Nigeria as marketers adjust their selling prices to reflect the higher acquisition cost.

The development is also expected to affect retail pump prices in several parts of the country, depending on transportation costs and regional supply dynamics.

Petroleum marketers said distributors would have little choice but to transfer the additional costs to end users to preserve operating margins.

Businesses Face Higher Operating Costs

The latest diesel price increase is expected to place additional financial pressure on businesses that depend heavily on diesel-powered operations.

Manufacturers, logistics firms, construction companies, telecommunications operators, hospitals and countless small and medium-sized enterprises rely on diesel to power generators and heavy equipment amid persistent electricity supply challenges.

Economic analysts warn that the higher fuel cost could further increase production expenses, transportation charges and distribution costs, with businesses likely to pass the additional burden to consumers through higher prices for goods and services.

The development could also complicate efforts to moderate inflation, as diesel remains a critical input across multiple sectors of the Nigerian economy.

Market Watches Other Fuel Prices

Industry observers are now closely monitoring whether Dangote Refinery will review the prices of other refined petroleum products, including Premium Motor Spirit (PMS) and aviation fuel, should international crude prices remain elevated.

The refinery has increasingly become a major price setter in Nigeria’s downstream petroleum sector, making its pricing decisions influential across the domestic fuel market.

Despite continuing to sell petroleum products in naira, analysts note that the refinery’s production costs remain largely influenced by global crude oil prices and international market conditions.

The latest diesel price adjustment underscores the extent to which global energy market developments continue to shape domestic fuel pricing, with consumers and businesses expected to bear the impact through rising operating costs and sustained inflationary pressure.