Dangote Refinery: Coastal Shipping May Push Petrol to ₦1,000/litre

Dangote Refinery has warned that distribution costs could raise fuel prices. The refinery relies heavily on coastal shipping to move petrol could add significant logistics costs, which may ultimately be passed on to consumers and push pump prices toward ₦1,000 per litre if fully passed through.

coastal evacuation is expensive compared with pipelines or land-based infrastructure. It reportedly estimates that coastal logistics can add about ₦75 per litre to the cost of PMS distribution. 

When multiplied across national volumes, the implied burden becomes huge. The statement cited daily consumption averages of roughly 50 million litres of PMS and 14 million litres of diesel, with an estimated additional annual cost around ₦1.752 trillion if coastal logistics becomes the dominant route.

Petrol affects transport costs, food distribution, informal business operations, and household budgets. When the logistics layer becomes inefficient, the entire economy absorbs the shock.

The point being made is not that coastal shipping has no role. In certain corridors, it can be useful. The issue is scale. If the system defaults to the costliest method because pipelines are constrained, security is uncertain, or inland infrastructure is weak, the supposed benefits of local refinement can be eroded by the last mile.

Reducing logistics friction, through pipeline rehabilitation, improved inland evacuation routes, and reliable storage/transport frameworks ,can matter as much as production capacity. Otherwise, the “cheaper local supply” story will keep colliding with the “costly movement” reality.