{"id":30305,"date":"2026-03-30T10:21:24","date_gmt":"2026-03-30T08:21:24","guid":{"rendered":"https:\/\/www.channelafrica.co.za\/channelafrica\/?post_type=news&p=30305"},"modified":"2026-03-30T10:21:24","modified_gmt":"2026-03-30T08:21:24","slug":"nigerias-giant-oil-refinery-fails-to-prevent-record-gasoline-prices","status":"publish","type":"news","link":"https:\/\/www.channelafrica.co.za\/channelafrica\/news\/nigerias-giant-oil-refinery-fails-to-prevent-record-gasoline-prices\/","title":{"rendered":"Nigeria’s giant oil refinery fails to prevent record gasoline prices"},"content":{"rendered":"
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Fuel prices in oil-producing Nigeria have reached record-high levels, industry figures show, as maximum output from the giant Dangote Petroleum Refinery has failed to shield \u200bthe country from the energy market impact of war in the Middle East.<\/span><\/p>\n<\/div>\n

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The 650 000 barrels-per-day refinery, Africa’s largest, became fully operational early this year.<\/span><\/p>\n<\/div>\n

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It was designed to \u200ctransform Nigeria into a major exporter of refined products after decades of inadequate refinery capacity. In the past, that repeatedly led to fuel shortages but government subsidies kept pump prices low.<\/span><\/p>\n<\/div>\n

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President Bola Tinubu removed this buffer when he took office in 2023, promising reforms that earned plaudits from international investors.<\/span><\/p>\n<\/div>\n

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Now Nigerians face the shock of a 65% price spike, the largest among major African economies as the impact of the new refinery has been blunted by the need to import \u200blarge volumes of expensive crude from abroad, even though Nigeria is Africa’s biggest oil producer.<\/span><\/p>\n<\/div>\n

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The constraint stems from Nigeria\u2019s financing model: state oil firm the \u200bNigerian National Petroleum Company Limited\u2019s joint\u2011venture crude is tied to oil-backed loans and pre\u2011export deals.<\/span><\/p>\n<\/div>\n

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That means much of Nigeria’s roughly 1.5 million barrels-per-day of production goes \u2060to paying debts to international oil majors, banks and traders. The NNPC does not disclose its obligations, but analysts estimate they amount to about 400 000 bpd.<\/span><\/p>\n<\/div>\n

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David Bird, Managing Director at Dangote, told local \u200btelevision that the company can only source about five crude cargoes a month locally, far short of the 13\u201315 required.<\/span><\/p>\n<\/div>\n

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It has to import the rest at prices dictated by the impact of the Middle \u200bEastern war. For Nigeria the size of a cargo is typically around a million barrels.<\/span><\/p>\n<\/div>\n

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The difficulty is compounded because Nigeria does not have a strategic fuel reserve and the government has yet to begin action to set one up.<\/span><\/p>\n<\/div>\n

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“A strategic reserve would have shielded Nigeria somewhat from the inflationary effects of price spikes and keep refineries supplied during prolonged disruptions,” Mikolaj Judson, an analyst at advisory company Control Risks, said.<\/span><\/p>\n<\/div>\n

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–Reuters–<\/span><\/p>\n<\/div>\n","protected":false},"featured_media":20458,"template":"","meta":{"_acf_changed":false,"_links_to":"","_links_to_target":""},"news-type":[44],"class_list":["post-30305","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-finance","entry"],"acf":{"short_description":"","published_date":"","news_description":"Fuel prices in oil-producing Nigeria have reached record-high levels","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/30305","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":1,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/30305\/revisions"}],"predecessor-version":[{"id":30306,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/30305\/revisions\/30306"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/20458"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=30305"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=30305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}