Dangote Refinery resumes coastal petrol loading, hikes price by 11.2%

Dangote Petroleum Refinery resumed coastal loading of Premium Motor Spirit (PMS) on Monday, July 21, after a six-day suspension that disrupted fuel supply nationwide. The refinery raised its coastal PMS price to $1,161.23 per metric tonne, up from $1,044.62 per metric tonne before the suspension, a jump of $116.61/MT or about 11.2%.

Resumption after six-day halt

The refinery began accepting coastal loading orders again on Monday, July 21, after notifying customers on Tuesday of the new terms. The resumption comes after the facility suspended both coastal and gantry loading on Wednesday, July 15, when it switched to a dollar-denominated pricing model for refined petroleum products.

A source with direct knowledge of the development confirmed that depots receiving supplies through coastal channels had already begun passing the update to their own customers. The source said: "We have issued communication to all customers loading through the coastal channel, and depots that receive products through coastal deliveries have already started notifying their customers. Coastal loading resumed yesterday with the new coastal price. Gantry sales remain on hold, but from what we are seeing, gantry operations may also resume soon."

Gantry loading still suspended

While marine deliveries are back in operation, truck loading through the gantry remains on hold. Industry operators say the gantry channel is the refinery's primary distribution route, and its return is expected to have the most significant effect on petrol supply across the country and on ex-depot prices at inland locations.

The six-day pause in loading forced marketers to turn to private depots to keep their operations running, and the increased cost of sourcing supply was passed directly to buyers. The average ex-depot price of petrol in Lagos climbed from around N1,075 per litre before the suspension to roughly N1,275 per litre, a rise of N200 per litre or about 18.6%.

Before halting operations, the refinery had set its PMS price at $0.779 per litre, diesel at $1.087 per litre, and Jet A1 aviation fuel at $0.942 per litre. The switch to dollar-denominated pricing was linked to difficulties the refinery faced in procuring enough crude oil under the Federal Government's naira-for-crude exchange arrangement.

What this means for consumers

Industry sources say the resumption of coastal loading should ease some of the supply pressure on depots served by sea, though the broader market will remain constrained until gantry operations are restored and a revised truck loading price is announced. Nigerian fuel importers are confronting an increasingly difficult commercial environment as surging international petrol prices and steeper freight charges tighten the economics of bringing petrol into the country, while Dangote Refinery's pricing strategy limits their ability to recover those costs. A Daily Refined Products Commentary published by S&P Global Commodity Insights says market participants have grown more concerned about the widening gap between what it costs to import petrol and what can realistically be charged in the Nigerian market.