Dangote Refinery raises diesel price to N1,670 as crude oil hits $94

Dangote Refinery has raised the gantry price of Automotive Gas Oil (AGO), commonly known as diesel, by N100 per litre as rising international crude oil prices put renewed pressure on domestic energy costs.

A market survey conducted on Thursday showed that the refinery increased the price of diesel from N1,570 to N1,670 per litre, representing a 6.4 per cent increase.

The development means diesel prices could rise further at filling stations and other retail outlets, where the product is currently selling for between N1,700 and N1,790 per litre Lagos.

Dangote Refinery, which has a nameplate capacity of 650,000 barrels per day and has been ramping up operations toward higher throughput, had not officially confirmed the latest adjustment as of the time of reporting.

The latest price movement marks a reversal of the reduction announced earlier in the month.

On August 6, the refinery reduced its gantry price for diesel to N1,570 per litre, while cutting the price of Premium Motor Spirit (PMS) to N1,165 per litre.

However, while the diesel price has now been reviewed upward, the refinery’s PMS gantry price remained unchanged at N1,165 per litre as of Thursday.

As of 2 p.m. on Thursday, Brent crude was trading at $94.13 per barrel after gaining about two per cent, while West Texas Intermediate (WTI) rose about three per cent to $87.13 per barrel.

The rise in crude prices has increased concerns over renewed pressure on refined petroleum product prices, particularly diesel, whose market price is strongly influenced by crude oil and international refined-product benchmarks.

An energy economist, Bayo Abioye, said the diesel increase was not entirely unexpected given the recent movement in global crude prices.

“Diesel pricing is highly exposed to international crude and refined-product market movements. When crude prices rise sharply, domestic refiners face higher opportunity costs even when the product is being refined locally,” the analyst said.

He, however, noted that the impact of crude oil prices on domestic diesel prices would depend on the refinery’s crude supply arrangements, operating costs, exchange-rate movements and prevailing market conditions.