Nigerian fuel importers are coming under renewed pressure as rising international petrol prices and higher freight costs increase the cost of imports, while the Dangote Petroleum Refinery’s pricing continues to limit profit opportunities, a new market report has revealed.
The latest Daily Refined Products Commentary by S&P Global Commodity Insights said market participants were increasingly concerned about higher global fuel prices and their impact on Nigeria’s import market.
According to the report, traders said petrol destined for Ghana attracts higher premiums than Nigerian-specification products because domestic prices in Nigeria remain constrained by the Dangote refinery’s pricing.
The report noted that petrol prices in Lomé have risen above Dangote refinery’s sales prices, effectively eliminating arbitrage opportunities into the Nigerian market.
It stated that while the situation has shut the arbitrage window for Nigeria, the same does not apply to Ghana.
Despite expectations that the Dangote refinery would raise its coastal sales price, the report said the company kept prices unchanged, although its recently introduced dollar-denominated pricing could influence future price movements.
The report also identified rising freight costs as another challenge for importers, noting that shipping rates for petroleum products from Europe to West Africa have increased as vessels reposition.
According to S&P Global Commodity Insights, the Clean UKC–West Africa 37,000-metric-tonne freight rate rose to $37.12 per metric tonne, up from $29.70 per metric tonne recorded on June 30.
In the diesel market, the report said reduced supplies from Russia’s Black Sea region have pushed up the cost of high-sulphur gasoil in West Africa, keeping the sulphur spread relatively narrow.
It assessed the gasoline FOB West Africa price at $1,053 per metric tonne, while the STS Lomé price stood at $1,078 per metric tonne.
The report also put FOB Northwest Europe–West Africa cargoes at $1,005 per metric tonne, with a CIF net forward value of $1,042.25 per metric tonne.
For diesel, the STS Lomé assessment was $1,173.50 per metric tonne, while the FOB West Africa diesel price was assessed at $1,233.50 per metric tonne.
According to the report, Nigerian fuel importers are likely to continue facing tighter margins unless international fuel prices and freight costs decline or domestic pricing conditions change.
It added that the Dangote refinery’s pricing strategy remains a major factor shaping the country’s petrol import market.
