Dangote Refinery targets fuel price stability despite global crude oil volatility

The Dangote Petroleum Refinery says it is targeting fuel price stability in Nigeria despite ongoing volatility in global crude oil markets, positioning domestic refining as a buffer against external price shocks.

This was disclosed by the Managing Director and Chief Executive Officer of Dangote Refinery, David Bird, during his formal unveiling in Lagos on Wednesday, an event attended by Nairametrics.

The remarks come as Nigeria continues to adjust to a fully liberalised fuel market, where domestic fuel prices are increasingly influenced by international crude oil benchmarks and exchange rate movements.
Bird said the refinery’s pricing strategy aligns with Nigeria’s broader goal of achieving swift and sustainable downstream price stability.

What Bird is saying

According to Bird, the refinery’s objective is not to eliminate price movements entirely, but to prevent extreme and unpredictable price swings often associated with import-dependent fuel markets.

“From price stability, that is definitely the President’s objective as soon as possible,” Bird said.

“In Australia, the price at petroleum stations can change three times a day. It’s extremely volatile, and that is not justified.”

He explained that while crude oil prices remain the primary driver of fuel price volatility, Dangote Refinery is focused on ensuring that changes in petrol and diesel prices remain within a predictable and manageable range.

“Our objective is to drive price stability within a range,” he said.

“Crude oil is the primary driver of price volatility, but we are in a processing business. You will see some volatility in diesel and gasoline prices, so we need to monitor that within a range.”

How domestic refining moderates price shocks.

Bird noted that the refinery’s pricing model is anchored on international benchmarks, but adjusted to reflect domestic production realities, allowing it to moderate sudden price shocks.

“So, our objective is to draw stability and it has to be in the range of the international benchmarks,” he added.

He cited recent market developments as evidence of the refinery’s stabilising impact, pointing out that despite sharp fluctuations in global crude oil prices, Nigeria experienced relative price calm, especially during the festive period.

“Look at the wild ride oil prices have had in the meantime. Yet, we have sustained price stability here, particularly during the festive season, all with our own production,” Bird said.

He further explained that countries heavily dependent on fuel imports are more vulnerable to international price volatility, foreign exchange pressures, and supply disruptions.

“If you are fully import-dependent, then you are fully exposed to the fluctuations in the international market,” he said, adding that domestic refining capacity helps insulate Nigeria from these risks.

Why this matters

Fuel price volatility has far-reaching implications for inflation, transportation costs, and overall economic stability in Nigeria.

With petrol and diesel prices directly affecting households and businesses, sharp price swings can quickly erode purchasing power and increase operating costs.

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The Dangote Refinery’s scale and integrated operations are expected to reduce Nigeria’s reliance on fuel imports, ease pressure on foreign exchange demand, and strengthen energy security. While domestic fuel prices may still respond to global crude oil movements, local refining is projected to dampen extreme volatility and improve price predictability over time.

What you should know

Nigeria fully liberalised its petrol market in 2023, increasing sensitivity to global crude oil prices and exchange rate fluctuations.
The Dangote Refinery has a capacity of 650,000 barrels per day, making it Africa’s largest single-train refinery.

Nairametrics reported that David Bird was appointed MD/CEO of Dangote Refinery in August 2025.

In October 2025, the refinery announced plans to expand capacity to 1.4 million barrels per day.

In November 2025, Dangote Industries signed a major agreement with Honeywell to provide advanced refinery services and technology to support the expansion.