The Dangote Refinery has said that various charges imposed by numerous government agencies are contributing to the rising cost of petrol in Nigeria, adding that these fees form part of the expenses that eventually affect the pump price consumers pay.
David Bird, Managing Director of the refinery, made this known during a press conference in Lagos on Monday, where he explained that the refinery deals with about 47 different government agencies in the course of its operations. According to him, each of these agencies imposes regulatory fees or administrative charges that increase the overall cost of refining and distributing petrol.
Bird said the cumulative effect of these charges across the supply chain places additional financial pressure on refiners, which ultimately reflects in the final retail price of fuel. He stressed that if these costs are reduced, it could help ease the burden on both producers and consumers.
The refinery boss urged government institutions to review their roles and contributions to the petroleum value chain, particularly in areas where regulatory costs may be unnecessarily increasing operational expenses.
“I would also advocate that all government agencies look at their contribution to taking cost out of the value chain,” Bird said.
He explained that the refinery encounters different charges at multiple stages of its operations, whether from regulators or maritime and port authorities.
“We still feel there is a lot of regulatory cost at every step of our processing, whether that is the regulator, the Nigerian Ports Authority (NPA), or the Nigerian Maritime Administration and Safety Agency (NIMASA). In total, we deal with 47 different government agencies and incur costs from them,” he said.
Bird said every agency involved in the sector should consider how its activities and charges affect the broader goal of making fuel more affordable for Nigerians.
“I think there is a role for every government agency to look closely at what they can do to help remove costs from the supply chain,” he said.
Beyond regulatory charges, Bird also raised concerns about the supply of crude oil to local refineries, saying the domestic refining industry is not always given priority when Nigerian crude is allocated.
According to him, the Dangote Refinery often submits a list of preferred crude oil grades to the government each month, including Bonny Light and Escravos, but these grades are frequently sold to international buyers before domestic refiners are considered.
As a result, the refinery sometimes has to purchase crude oil from international traders, who add their own margins before reselling it, thereby increasing the refinery’s production costs.
“We put forward every month a whole list of grades that we prefer. We like Bonny Light, we like Escravos,” Bird said.
“What we are asking is that domestic refiners should be treated as customers of first preference rather than customers of last resort,” he added.
He said the refinery understands that the Nigerian National Petroleum Company (NNPC) may have contractual commitments with international partners but called for greater transparency in how crude oil allocations are made.
According to him, some of the crude grades requested by the refinery later reappear on the international market through traders.
“Because the ones we ask for, we then find are coming back on the market through international traders. That’s what is disappointing,” Bird said.
He therefore urged the government to prioritise Nigeria’s domestic refining industry, particularly under initiatives such as the crude-for-naira programme, before selling crude oil to foreign trading companies.
Bird noted that many countries are currently prioritising their local industries due to the instability in the global oil market.
“All countries are being very self-interested. China has banned exports. In fact, many countries with refining industries, such as Thailand and Vietnam, have banned exports,” he said.
He added that some nations are also releasing crude from their strategic reserves to ensure their domestic industries have sufficient supply.
According to him, Nigeria should adopt a similar approach by ensuring that local refineries have reliable access to crude oil.
Meanwhile, petrol prices in Nigeria have recently risen sharply, with the pump price of a litre increasing by more than ₦350 following the escalation of tensions between Iran and the United States, which resulted in the closure of the Strait of Hormuz, a key global oil shipping route.
