The Dangote Oil Refinery is set to incur a N32.5 billion loss due to its recent reduction in the ex-depot price of Premium Motor Spirit (PMS), commonly known as petrol.
This financial hit comes as a result of the refinery’s decision to cut petrol prices from N890 to N825 per litre despite holding a stockpile of 500 million litres before the adjustment.
Price Cut and Its Financial Impact
Before the price slash, the 500 million litres of petrol in the refinery’s storage was valued at N445 billion if sold at N890 per litre. However, with the new pricing at N825 per litre, the refinery’s revenue from the stock has now dropped to N412.5 billion, resulting in a N32.5 billion shortfall.
Commitment to Price Reductions
The recent price cut is part of a series of reductions implemented by the Dangote refinery. In February 2025, the company first lowered the ex-depot price by N60, followed by another N65 reduction later in the month. A similar price drop was also observed in December 2024, when petrol prices fell from N970 to N899.50 per litre during the festive season.
A statement from Dangote Petroleum Refinery emphasized that these reductions aim to ease the financial burden on Nigerians, stabilize fuel supply, and prevent the usual scarcity and price hikes experienced during festive periods.
Market Reactions and Importers’ Concerns
While Nigerians have welcomed the price cut, fuel importers and marketers are grappling with significant losses. Many importers claim that Dangote’s frequent price reductions are making fuel importation increasingly unprofitable, forcing them to sell at lower margins or incur heavy financial setbacks.
Industry estimates suggest that importers could lose N2.5 billion daily, amounting to approximately N75 billion per month due to the latest price adjustment.
Marketers with old fuel stocks have also been hit hard, as they are now forced to sell below their original purchase price, resulting in substantial losses.
Future Price Projections
With the landing cost of petrol now standing at N783.66 per litre, industry analysts predict that pump prices could drop further to N800 per litre in the near future.
Meanwhile, filling stations nationwide have started reflecting the lower prices. For instance, NNPCL retail outlets in Lagos have already adjusted their pump prices to N860 per litre.
As consumers celebrate the lower fuel costs, stakeholders continue to monitor the impact of Dangote’s pricing strategy on the broader energy market and fuel importation dynamics in Nigeria.
