A sustained decline in the pump price of Premium Motor Spirit (PMS), commonly known as petrol, is providing relief to Nigerian consumers, with industry officials attributing the trend to increased domestic refining and a stronger national currency.
Oil marketers confirm that prices have been on a downward trajectory, driven primarily by growing output from the landmark Dangote Refinery and recent gains in the value of the Naira against the US dollar.
“Yes, the prices are going down,” said Chinedu Ukadike, Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN). “It has to do with one, production increase by Dangote. Two, the value of the dollar… The more the dollar goes down, the better.”
The Dangote Refinery, which began partial operations earlier this year, has implemented multiple price reductions in 2025. In a significant move to bolster national supply, the company pledged in December to provide over 1.5 billion litres of petrol monthly from its Lagos facility.
Marketers report that improved supply chain efficiencies have eliminated fuel scarcity and panic buying, leading to market stability. “Previously, getting the products, especially at this time of the year, can be a bit challenging for independent marketers. But now, with government’s recent assurances that there will be enough supply, thankfully there is no panic buying,” noted Kingsley Smart, a fuel distributor in Abuja.
He added that both the Nigerian National Petroleum Company (NNPC) Limited and Dangote Refinery have reduced their depot prices in response to improved domestic refining capacity and a mild decline in international crude oil prices.
Dangote Refinery has explicitly stated that its pricing strategy is internally driven, based on production efficiency and competitive positioning, and not influenced by government tariff policies. “The reduction in our petrol price was not due to any change in import tariff,” the company clarified in November, describing the move as “a strategic decision to encourage domestic sourcing of refined products and create better market value.”
Despite the progress, industry leaders warn that smuggling remains a persistent threat due to significant price disparities with neighbouring countries. Aliko Dangote, Chairman of the Dangote Group, noted that Nigerian petrol sells for about 55% less than in surrounding nations, creating a lucrative incentive for illegal cross-border trade.
“They are selling at almost N1,500, N1,600 [per litre], but we’re selling at about N800 and something,” Dangote said following a meeting with President Bola Tinubu.
To combat this, the federal government has intensified border security through initiatives like “Operation Whirlwind,” led by the National Security Adviser and the Nigeria Customs Service. IPMAN’s Ukadike also highlighted that Dangote’s legal exports to neighbouring countries at competitive rates offer a sustainable alternative to smuggling, helping to stabilize the regional market.
The combined effect of local production, currency stability, and improved supply has restored confidence in the downstream sector, with many filling stations now operating extended hours due to reliable product availability.
