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Fuel prices in oil-producing Nigeria have reached record highs, even after the giant Dangote Petroleum Refinery became fully operational earlier this year. Reuters said the refinery was meant to transform Nigeria into a major exporter of refined products, but the Middle East war has exposed the country to higher crude costs and supply disruptions.
Nigeria’s gasoline pump prices have risen by 65%, the highest increase among major African economies. The article said the refinery has had to import large volumes of expensive crude from abroad because local supply is limited and the government’s financing model ties much of production to debt-backed deals and pre-export arrangements.
Dangote’s managing director, David Bird, said the plant can source only about five crude cargoes a month locally, compared with the 13 to 15 it requires. That shortfall forces imports at prices shaped by the Middle East conflict, while Nigeria’s lack of an official strategic fuel reserve leaves it with little protection against supply shocks.
Reuters said the situation is compounded by the structure of Nigeria’s oil industry, where the state oil company’s joint-venture output is tied to loans and obligations to international oil majors, banks and traders. Analysts said a strategic reserve could have softened the inflationary impact of price spikes and helped keep refineries supplied during disruptions.
The war in the Middle East has also worsened shipping risks through the Strait of Hormuz, a route for about one-fifth of global energy supplies. That has made Nigeria’s fuel market more vulnerable despite its status as Africa’s biggest oil producer.
