Dangote Petroleum Refinery has said it remains fully exposed to international commodity markets, including crude oil prices, freight charges, insurance costs, and financing expenses.

The refinery explained that volatility in global oil markets is increasing operational costs.

The Managing Director and Chief Executive Officer of Dangote Petroleum Refinery, Mr. David Bird, who spoke at a press briefing on Monday, said that although Nigeria introduced a crude-for-naira arrangement to enable local refineries to purchase crude oil in the local currency, the pricing of the commodity remains tied to international benchmarks.

As a result, the refinery still buys Nigerian crude at global market prices and does not benefit from discounted supply.

The impact of global volatility has been evident in the sharp rise in crude prices, which surged from the mid-$60 range to nearly $120 per barrel within a week, reflecting heightened uncertainty across international energy markets.

Shipping costs, Bird said, have also increased significantly.

“Freight costs have surged dramatically, with tanker costs rising from about $800,000 to roughly $3.5 million per shipment in the current market environment,” the company said on its X handle.

He added that despite the cost pressures, the Dangote refinery continues to operate at its full nameplate capacity of about 650,000 barrels per day, with the potential to increase output to around 700,000 barrels per day.

The refinery recently revised its ex-depot prices, increasing the gantry price of Premium Motor Spirit (PMS), also known as petrol, to ₦1,175 per litre, while Automotive Gas Oil (AGO), commonly known as diesel, has been raised to ₦1,620 per litre.

The latest revision marks the fourth consecutive price review in less than two weeks amid global market volatility, according to a report by Petroleumprice.ng.

Quoting industry sources, the report noted that the new pricing template has been communicated to marketers following earlier adjustments this month.

Under the revised structure, the ₦1,175 per litre petrol price represents a significant jump from the previous ₦995 per litre, while diesel has surged sharply from its earlier ₦1,430 per litre level, underlining the continued upward trend in domestic fuel pricing.

The increases coincide with a sharp rise in international crude oil benchmarks. As of 1:00 pm WAT, Brent crude stood at $102.8, up 10.91 per cent, while West Texas Intermediate crude traded at $101.0, up 11.08 per cent, amid the Middle East energy crisis.

The current turbulence in energy markets has been intensified by escalating hostilities involving the United States, Israel, and Iran, which have disrupted global commerce and energy flows.

Tensions in the Middle East have also affected shipping activity through the Strait of Hormuz, a strategic corridor that carries roughly one-fifth of global oil shipments.

Security threats linked to the conflict have forced some vessels to avoid the route, slowing tanker traffic and pushing up global shipping and insurance costs.

The conflict has also triggered a sharp rise in global energy prices and increased volatility in international financial markets, with analysts warning that a prolonged crisis could disrupt major oil and gas supply routes.

In addition, some energy facilities in the Gulf region have reportedly halted operations due to security concerns, further tightening supply and contributing to the surge in energy prices across global markets.

The developments highlight the continued influence of geopolitical tensions on the global energy trade and the challenges faced by refineries worldwide.