The expectation that local refining would automatically lead to cheaper petrol in Nigeria may need to be reconsidered, as global market forces continue to outweigh domestic efforts.

Speaking during a recent interview, David Bird, Managing Director of the Dangote Refinery, explained that petrol pricing is still heavily influenced by international realities, particularly ongoing tensions in the Middle East.

In simple terms, even though Nigeria now refines some of its fuel locally, the cost of producing that fuel is still tied to global factors the country cannot control.

The refinery, he noted, operates without subsidies, meaning it must absorb the full impact of fluctuating costs. From crude oil prices to shipping and insurance, every stage of production is affected by changes in the global market.

That explains why petrol prices have remained high, even at a time when crude oil prices briefly dipped earlier in the week. Across Nigeria, pump prices are still hovering around ₦1,300 per litre, following a sharp increase recorded recently.

Bird described the situation as more than just a fuel issue, calling it part of a wider cost-of-living challenge affecting Nigerians.

According to him, energy costs sit at the centre of modern economies, so when they rise, the effects are felt across transportation, food prices, and general living expenses.

He also pointed out that even if global tensions ease today, the impact on supply chains won’t disappear overnight. It could take months before any real price relief is seen.

Beyond global pressures, Bird raised concerns about local supply challenges. Despite being based in Nigeria, the refinery does not get enough crude oil domestically and often cannot access the specific grades it needs.

As a result, the company still relies significantly on imports, sometimes buying Nigerian crude from international markets at a premium.

While part of its supply comes through the government’s crude-for-naira arrangement, that alone isn’t sufficient to meet demand.

For Bird, the solution goes beyond just refining locally. He believes the government needs to take a broader look at the entire system—from crude allocation to the overall cost of doing business in Nigeria.

He also stressed the importance of long-term planning, such as building strategic reserves, to protect the country from future global disruptions like those experienced during COVID-19.