Manny Ita –
Rising volatility in global oil markets has sharply increased operational costs for the Dangote Refinery, with tanker freight rates surging amid fluctuations in crude oil prices.
An executive of the refinery said global crude markets had experienced sharp swings within a short period, creating cost pressures across the petroleum supply chain.
“Global oil markets are experiencing extreme volatility, with crude prices rising from the mid-$60 range to nearly $120 per barrel within a week,” said Devakumar Edwin.
He said the refinery’s operations remain fully exposed to international commodity market dynamics, including fluctuations in crude oil prices, freight charges, insurance costs and financing expenses.
According to him, tanker freight costs have risen significantly, increasing from about $800,000 to roughly $3.5 million per shipment within the period of heightened market volatility.
Despite the rising costs, the refinery continues to maintain full operational output.
“Dangote Refinery operates at its full nameplate capacity of about 650,000 barrels per day, with potential to increase production to around 700,000 barrels per day,” said Anthony Chiejina.
Owned by African industrialist Aliko Dangote, the refinery is widely regarded as a major development in Nigeria’s energy sector and one of the largest single-train refineries in the world.
The project was designed to reduce Nigeria’s dependence on imported refined petroleum products while strengthening domestic fuel supply and improving energy security.
The company previously stated that it does not compete directly with the Nigerian National Petroleum Company Limited, noting that both entities play complementary roles within the country’s refining and fuel distribution system.
Industry analysts say the refinery has become a key player in Nigeria’s downstream petroleum sector, with the capacity to meet the country’s fuel demand and potentially cushion the impact of international supply disruptions.
