Nigerian fuel importers are facing increasing pressure as rising international petrol prices and higher shipping costs drive up import expenses, while the Dangote Petroleum Refinery’s pricing continues to limit profitable import opportunities.

A new Daily Refined Products Commentary by S&P Global Commodity Insights said traders are concerned that Nigeria’s petrol market remains heavily influenced by Dangote’s pricing, making it difficult for importers to compete despite higher prices in neighbouring West African markets.

The report noted that petrol prices in Lomé have risen above Dangote’s selling price, eliminating arbitrage opportunities into Nigeria. It also stated that although traders expected the refinery to raise its coastal sales price, it maintained existing prices, even as its recently introduced dollar-based pricing could influence future market trends.

In addition, freight costs for transporting petroleum products from Europe to West Africa have increased, further squeezing importers’ profit margins. The report added that tighter supplies of Russian diesel have also pushed up diesel prices across the region.

According to S&P Global Commodity Insights, importers are likely to continue facing tighter margins unless global fuel prices and freight costs decline or domestic pricing conditions change.