• Nigerian fuel importers are under growing pressure as rising international petrol prices increase landing costs
• Dangote Refinery's pricing has effectively set a price ceiling in Nigeria, leaving importers unable to pass on higher costs to marketers
• S&P Global Commodity Insights said arbitrage opportunities from Lomé have closed

Nigerian fuel importers are confronting an increasingly difficult commercial environment as surging international petrol prices and steeper freight charges tighten the economics of bringing Premium Motor Spirit (PMS) into the country, while Dangote Petroleum Refinery's pricing strategy limits their ability to recover those costs.

A Daily Refined Products Commentary published by S&P Global Commodity Insights says market participants have grown more concerned about the widening gap between what it costs to import petrol and what can realistically be charged in the Nigerian market.

Dangote Prices Cap Import Returns

The core of the problem, according to S&P Global, is that Dangote Refinery has effectively set the price ceiling for petrol in Nigeria, Punch reports.

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Traders told the commodity intelligence firm that premiums for Ghanaian-specification petrol have climbed above Nigerian-specification cargoes precisely because domestic prices remain anchored to the refinery's output rates.

As one trader quoted in the report put it:

"Prices are capped by Dangote prices."

The report also noted that petrol values in Lomé, Togo, have risen above Dangote Refinery's coastal sales prices, eliminating what had previously been a viable arbitrage route for marketers importing into Nigeria.

S&P Global stated:

"Lome values have risen above