A fierce price battle is brewing in Nigeria’s petroleum downstream as Dangote Refinery’s petrol price cuts send shockwaves through the industry, putting pressure on importers struggling with soaring costs.
With the landing cost of imported Premium Motor Spirit (PMS), also known as petrol, now at N929.26 per litre, concerns are mounting over the viability of fuel imports and the potential market realignment driven by Dangote’s competitive pricing strategy.
Dangote Refinery recently made waves by reducing its ex-depot price from N950 to N890 per litre on Saturday, a move that has already begun to intensify competition and unsettle fuel importers who are facing higher costs. Some industry sources, speaking on condition of anonymity, expressed concerns that marketers expecting shipments of imported petrol may suffer significant losses. They pointed out that by the time the cargo arrives, the landing cost would be much higher than Dangote’s current price of N890 per litre.
“Since Dangote Refinery came into the picture, there has been a drastic drop in gasoline volumes delivered to Nigeria. The European traders are doing everything possible to undermine the output and supplies from Dangote Refinery, hoping Nigerian marketers will return to them,” one source revealed.
As of Friday, January 31, oil marketers disclosed that the landing cost of petrol stood at N929.03 per litre. According to the latest Competency Centre Daily Energy Data from the Major Energies Marketers Association of Nigeria (MEMAN), the on-spot estimated import parity into tanks was N929.26 per litre, while the 30-day average cost had risen to N940.03 per litre. This was up from N929.07 per litre on January 23 and N900.74 per litre on January 22.
Before Saturday’s price cut, Dangote Refinery had also reduced the price of petrol in November 2024 from N900 to N970 per litre for oil marketers. Then, in December, the refinery followed up with another price cut, lowering the price from N900 to N899.50 per litre. However, in January 2025, Dangote announced an upward revision of its ex-depot price for petrol.
For quantities ranging from 2 million to 4.99 million litres, the new price was set at N955 per litre, up from N899.50, and for 5 million litres and above, the price stood at N950 per litre, up from N895. This adjustment was linked to the sharp increase in global crude oil prices.
In a statement released on Saturday, Anthony Chiejina, the Group Chief Branding and Communications Officer of Dangote Petroleum Refinery, attributed the price reduction to favorable developments in the global energy sector, particularly a significant decline in international crude oil prices. Chiejina explained that the decision to lower prices was part of a broader initiative to offer economic relief to Nigerians.
“Dangote Refinery’s decision reflects its commitment to aligning with market realities and ensuring that consumers benefit from changes in international crude oil prices,” Chiejina said. The company also emphasized that the price reduction was expected to significantly lower petrol costs nationwide, generating a ripple effect across the economy.
The refinery also expressed its support for President Bola Tinubu’s administration in making Nigeria self-sufficient in refined petroleum products, positioning the country as a leading oil export hub. This collective initiative aims to stabilize the country’s economy and ensure that Nigerians benefit from lower fuel prices.
Industry reactions to the price reduction have been generally positive. The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) welcomed the development, describing it as a positive move for both citizens and the economy.
Joseph Obele, the National PRO of PETROAN, and Billy Gillis-Harry, the association’s president, expressed their support, stating that the price reduction would ease the financial burden on Nigerians, reduce transportation costs, and positively impact the overall cost of living.
“The reduction in PMS ex-depot price is expected to have a far-reaching impact on the lives of Nigerian citizens,” Gillis-Harry said. He emphasized that competition remains a key element of a deregulated economy and expressed optimism that other refinery operators and PMS importers would follow suit to remain competitive.
The reduction in petrol prices is expected to influence market forces, leading to lower prices for goods and services, a decline in inflation, and improved purchasing power for consumers. As petrol prices drop, the cost of transporting goods and services will also decrease, spurring economic activity and growth.
Gillis-Harry further noted that lower fuel prices would help curb inflation, as reduced production and transportation costs would lead to lower prices for goods and services, making life more affordable for Nigerians.
With Dangote Refinery’s latest price adjustment, stakeholders expect a shift in Nigeria’s petroleum market landscape, with increased competition among local refiners and a gradual decline in reliance on imported fuel. The market will be closely watched for any further developments as the country navigates this new era in the petroleum industry.
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