Dangote Group is subsidising petrol and diesel prices in Nigeria, according to a senior official of the company.
The Dangote refinery petrol subsidy was disclosed on Monday, with the official stating that the company’s ex-depot petrol price remains below the competitive market rate.
Petrol Price Below Market Level
The official, who spoke anonymously due to lack of authorisation, said the refinery’s N1,200 per litre price is lower than what market conditions would normally dictate.
This comes as global crude oil prices rise sharply following tensions in the Middle East.
Reports show that Brent crude increased from about $66 per barrel in February to over $100 per barrel after disruptions linked to the Iran crisis.
Rising Crude Prices Driving Costs
The increase in crude oil prices has affected the cost of petrol, diesel, and aviation fuel.
According to the Dangote official, the company has tried to keep petrol and diesel prices stable despite the rising cost of production.
“With crude prices moving up, we try to optimise petrol and diesel prices to support the public,” the source said.
The official confirmed that this “optimisation” effectively means subsidising the products.
Aviation Fuel Sold at Market Price
Unlike petrol and diesel, aviation fuel is not subsidised.
The refinery said it sells jet fuel at market rates due to the high cost involved.
Another company official disclosed that aviation fuel is currently sold to marketers at about N1,799 per litre, although retail prices remain significantly higher.
Airlines Struggle with High Fuel Costs
Airlines have raised concerns over rising aviation fuel prices.
The Airline Operators of Nigeria warned that the increase in Jet A-1 fuel could disrupt operations.
According to the group, prices have surged from around N900 per litre earlier in the year to as high as N3,300 in recent weeks.
Operators described the situation as unsustainable and warned of possible shutdowns if costs remain high.
Marketers Respond to Price Concerns
The Major Energies Marketers Association of Nigeria attributed the rising fuel prices to global factors, including geopolitical tensions.
The association also questioned reports of extremely high prices, stating that its internal survey showed lower average rates.
However, it advised airlines to seek alternative suppliers where possible.
The Dangote refinery petrol subsidy highlights the pressure facing Nigeria’s fuel market amid rising global oil prices.
While petrol and diesel prices are being moderated, aviation fuel costs remain a major concern for airlines and industry stakeholders.
