What is the reason for the high price of petrol in Nigeria even though the Dangote Refinery is oper?

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16 Mar 2026
24

Even though Dangote Refinery is operating in Lagos in Nigeria, petrol is still expensive due to several important reasons:
1️⃣ Petrol price follows the global market
Even if petrol is refined locally, its price still follows the global crude oil market price. When crude oil prices increase worldwide, petrol prices also rise.
2️⃣ Crude oil is purchased in dollars
Dangote Refinery buys crude oil using the US Dollar.
Since the value of the Nigerian Naira has weakened, the cost of producing petrol becomes higher.
3️⃣ Removal of fuel subsidy
The government of Nigeria removed the fuel subsidy. Because of this, petrol prices are now determined by the market, without government support to keep prices low.
4️⃣ Transportation and distribution costs
Even though petrol is refined in Lagos, it must still be transported to different states across the country. Transportation, storage, and distribution costs increase the final price.
5️⃣ One refinery cannot meet the entire demand
Although Dangote Refinery is very large, the demand for petrol in Nigeria is very high, and the supply and distribution system is still adjusting.
Summary:
Petrol is still expensive in Nigeria despite the operation of Dangote Refinery because of global oil prices, the weak Naira, removal of fuel subsidy, and distribution costs.

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