By Adewale Sanyaolu
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 called 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.
The company’s latest move to reduce its ex-depot price from N950 to N890 per litre on Saturday has sent ripples through the market, intensifying competition and unsettling fuel importers.
Some industry observers who spoke to Daily Sun in confidence said some marketers expecting cargoes of imported petrol may suffer losses.
They explained that by the time the cargo arrives, the landing cost would be higher than the current price of N890 per litre that Dangote is offering.
“Since the advent of Dangote Refinery, there has been a sharp drop in gasoline volumes delivered to Nigeria.
“Those European traders are doing everything possible to undermine output and supplies from Dangote Refinery so that Nigerian marketers can return to them,” a source told Daily Sun in confidence.
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 released by the Major Energies Marketers Association of Nigeria (MEMAN) on Friday, the on-spot estimated import parity into tanks was N929.26 per litre, while the average cost over 30 days rose to N940.03 per litre, up from N929.07 per litre on January 23 and N900.74 per litre on January 22.
Before the Saturday price drop, the refinery announced in November 2024 a reduction in the price of petrol to N970 from N900 per litre for oil marketers.
Again, in December, the Lekki-based refinery followed with another price cut from N900 to N899.50 per litre. However, by January 2025, the company announced an upward review of its ex-depot price of petrol.
According to the company, for quantities ranging from 2 million to 4.99 million litres, customers would now pay N955 per litre, up from N899.50.
Meanwhile, for 5 million litres and above, the new price was set at N950 per litre, up from N895.
It explained that the adjustment in its ex-depot price was directly linked to the significant increase in global crude oil prices.
In a statement released on Saturday, Anthony Chiejina, Group Chief Branding and Communications Officer attributed the price reduction to favourable developments in the global energy sector and a significant decline in international crude oil prices.
The company added that the decision to cut prices was also part of a broader plan to provide economic relief for 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,” the statement reads.
Chiejina explained that this latest move followed a modest price increase on January 19, which was necessitated by rising crude oil costs.
However, with recent global market trends indicating a decline, Dangote Refinery adjusted its pricing structure once again, bringing relief to Nigerians.
The statement further noted that the price reduction would significantly lower petrol costs across the country, generating a positive ripple effect throughout the economy.
“Dangote Petroleum Refinery firmly believes that this reduction from N950 to N890 will result in a meaningful decrease in the cost of petrol nationwide, thereby driving down the prices of goods and services, as well as the overall cost of living, with a positive ripple effect on various sectors of the economy,” it added.
The refinery also urged marketers nationwide to ensure that the benefits of the reduced price are passed on to the Nigerian public while reaffirming its support for President Bola Tinubu’s administration in making Nigeria self-sufficient in refined petroleum products and positioning the country as a leading oil export hub.
This collective initiative will contribute to the wider economic recovery plan led by President Bola Ahmed Tinubu, who is dedicated to making Nigeria self-sufficient in refined petroleum products and positioning the country as a leading oil export hub,” the statement added.
Dangote Petroleum Refinery’s latest decision is expected to play a strategic role in stabilising the country’s economy, ensuring that the benefits of lower fuel prices are felt across all sectors.
Reacting to the price slash, 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.
In a statement signed by Joseph Obele, National PRO, which quoted Billy Gillis-Harry, PETROAN President, the association commended Dangote Refinery’s management for reducing the ex-depot price of PMS from N950 to N890.
According to Gillis-Harry, this price reduction will ease Nigerians’ financial burden, reduce the cost of living and transportation, and have a far-reaching impact on economic stability.
“The reduction in PMS ex-depot price is expected to have a far-reaching impact on the lives of Nigerian citizens,” he stated.
He reaffirmed his earlier stance that competition remains the hallmark of a deregulated economy and expressed optimism that other refinery operators and PMS importers would follow suit to remain competitive.
Gillis-Harry further noted that the reduction in petrol prices would influence market forces, leading to lower costs of goods and services, a decline in inflation, and improved purchasing power for consumers.
“With a decrease in the cost of petrol, the prices of goods and services are likely to drop, leading to a reduction in the overall cost of living. This, in turn, will provide relief to households, who will have more disposable income to allocate towards other essential needs.”
He added that lower fuel prices would also spur economic activity, as businesses would be able to transport goods and services more efficiently and at reduced costs.
“Additionally, the reduction in PMS price will lead to an increase in demand for goods and services, positively impacting economic growth and development.”
Gillis-Harry further emphasised that lower fuel prices would help curb inflation, as reduced production and transportation costs would lead to lower prices of goods and services, ultimately 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.
Source: Daily Sun
