Nigeria's giant oil refinery fails to prevent record gasoline prices
Nigeria's giant oil refinery has failed to prevent record gasoline prices in oil-producing Nigeria. Fuel prices have reached record-high levels, according to industry figures. The impact of the new refinery has been blunted by the need to import large volumes of expensive crude from abroad.
The 650,000-barrels-per-day Dangote Petroleum Refinery, Africa's largest, became fully operational early this year. President Bola Tinubu removed government subsidies when he took office in 2023. Nigerians now face the shock of a 65% price spike. Much of Nigeria's roughly 1.5 million barrels-per-day of production goes to paying debts. David Bird, managing director at Dangote, said that the company can only source about five crude cargoes a month locally, far short of the 13-15 required. International oil prices have leapt to well above $100 a barrel, roughly 50% higher than before the war began. Between March 2 and March 21, fuel prices rose by about 10-17% in Ghana, were unchanged in Kenya, and increased by around 1% in South Africa. Salau Sodiq, a 25-year-old frozen-food-seller in Lagos, said, "The prices of fish and chicken have doubled, customers are complaining, sales are falling, and it's becoming harder for us to buy the volumes we need." Ride-hailing drivers in Lagos staged protests last week.
Mikolaj Judson, an analyst at advisory company Control Risks, said, "A strategic reserve would have shielded Nigeria somewhat from the inflationary effects of price spikes and keep refineries supplied during prolonged disruptions." The energy supply disruptions that have followed U.S.-Israeli attacks on Iran, which began at the end of
Quick Summary
Nigeria, Africa's largest oil producer, faces record-high fuel prices despite the fully operational Dangote Petroleum Refinery. The energy market is feeling the impact of war in the Middle East - and Nigerians are feeling the pinch.
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