A senior management official of the Dangote Group has revealed that the Dangote Petroleum Refinery has been subsidising petrol and diesel supplied to the Nigerian market.
The official, who spoke on condition of anonymity due to lack of authorisation, stated that the refinery’s ₦1,200 per litre ex-depot price for petrol is below prevailing market rates, especially in light of rising crude oil prices triggered by geopolitical tensions, including the US-Iran conflict.
Global oil prices surged significantly following disruptions in the Middle East, with Brent crude rising from about $66 per barrel in late February to over $100 per barrel at its peak. This spike has impacted the cost of refined petroleum products, including petrol, diesel, and aviation fuel.
According to the source, while the refinery has made efforts to cushion the impact of rising crude prices by “optimising” the cost of petrol and diesel, it cannot extend the same approach to aviation fuel, which is sold strictly at market rates.
“With crude prices rising sharply, we try to optimise the price of petrol to support the public, and to some extent, diesel as well. But we cannot subsidise everything, so aviation fuel is sold at market price,” the official said.
Another source within the company disclosed that the refinery currently sells aviation fuel to marketers at below ₦2,000 per litre, noting that the price stood at approximately ₦1,799 per litre as of Monday, and had been even lower previously.
Industry data also indicates that Dangote’s jet fuel gantry price has remained competitive compared to imported alternatives, which are slightly higher.
Despite this, airline operators have raised concerns over the rising cost of aviation fuel, with reports indicating prices have climbed from around ₦900 per litre earlier in the year to between ₦2,700 and ₦3,500 per litre in some cases.
The Airline Operators of Nigeria have warned that the situation is becoming unsustainable, noting that the increase is disproportionate to global crude price movements and is placing significant strain on airline operations.
Marketers, however, have attributed the rising cost of aviation fuel to global supply disruptions and market dynamics, while disputing claims of extreme pricing, stating that their internal surveys indicate lower average market prices.
As the situation persists, concerns continue to mount over the sustainability of airline operations, with operators warning of potential disruptions if fuel costs remain elevated.