By Kelechi Onwujuba
The Dangote Petroleum Refinery has reduced the ex-gantry price of Premium Motor Spirit (PMS), commonly known as petrol, by ₦50 per litre, bringing the price down from ₦1,125 to ₦1,075 per litre with immediate effect. The latest price adjustment is expected to strengthen competition in Nigeria's downstream petroleum market and could trigger fresh reductions in retail pump prices across the country.
The development represents the refinery's second downward price review within a week and the fourth reduction in approximately one month. Overall, the refinery has lowered its ex-depot petrol price by ₦200 per litre since the end of May, reflecting its commitment to transferring operational efficiencies and improving market affordability.
As part of the new pricing structure, Dangote Refinery has also harmonised its coastal loading price with the ex-gantry price at ₦1,075 per litre, eliminating the previous disparity between the two pricing channels. Industry stakeholders believe the move will encourage marketers sourcing products directly from the refinery to review their pump prices downward, ultimately benefiting consumers.
•Chief Aliko Dangote
The refinery said the revised pricing takes immediate effect and aligns with its broader objective of ensuring competitive pricing and expanding access to locally refined petroleum products. It also confirmed that product loading has been opened to all qualified marketers following the suspension of its earlier consortium sales arrangement.
Explaining the rationale behind its pricing model, the refinery noted that domestic petrol prices cannot be adjusted in line with daily movements in international crude oil prices because crude feedstock is procured several weeks or months before refining. Consequently, products currently being supplied were refined from crude purchased at significantly higher prices than prevailing global benchmarks.
According to the company, the average landed cost of crude processed stood at approximately $124.80 per barrel in May and $95.25 per barrel in June, compared to the current international crude oil price of about $71 per barrel. Despite the cost differential, the refinery said it absorbed a significant portion of the additional production costs rather than passing the full impact on to consumers.
Dangote Refinery maintained that the growth of domestic refining capacity continues to enhance Nigeria's energy security by reducing dependence on imported petroleum products, conserving foreign exchange and improving the stability of the local fuel supply chain amid persistent volatility in the international oil market.
Looking ahead, the company expressed confidence that continued moderation in global crude oil prices, alongside the gradual replacement of higher-cost crude inventories with lower-priced feedstock, could create room for further reductions in petrol prices. The latest price cut is expected to deepen competition in the downstream sector and provide additional relief to businesses and consumers grappling with high energy costs.
