The Centre for the Promotion of Private Enterprise (CPPE) says the development of domestic refining capacity in Nigeria will not automatically stop fluctuations in petrol prices.
In a policy brief released on Monday, the organisation’s Chief Executive Officer, Muda Yusuf, explained that local refineries remain closely linked to global crude oil market trends.
According to him, crude oil represents the largest component of refinery production costs and is priced using international benchmarks in U.S. dollars, regardless of whether the refining takes place locally or abroad.
The group noted that global crude oil prices recently rose from around $65 per barrel to more than $100 per barrel, largely due to geopolitical tensions in the Middle East. The increase, it said, has pushed up the cost of refined petroleum products across international markets.
CPPE said that while the emergence of local refining capacity could improve supply stability and strengthen energy security, it would not fully protect Nigeria from the impact of global oil price volatility.
However, the organisation added that domestic refining still offers several benefits, including lower logistics costs, reduced dependence on fuel imports, savings in foreign exchange, and improved energy security.
The comments come as Dangote Petroleum Refinery recently increased the gantry price of petrol to N1,175 per litre, marking the third price adjustment within a week amid rising global crude oil prices.
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