Earlier in the week, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, reiterated that fuel prices in a deregulated environment would be determined by market forces rather than government directives
kaNo —
The Dangote Petroleum Refinery has reduced its ex-gantry price of Premium Motor Spirit (PMS), commonly known as petrol, by N50, lowering the price from N1,125 per litre to N1,075 per litre, in a move expected to intensify competition in Nigeria’s downstream petroleum sector.
The latest adjustment, confirmed on Thursday, represents a 4.4 per cent decrease and marks the refinery’s second price cut within a week. The product price had earlier dropped from N1,175 to N1,125 per litre before the new reduction to N1,075 per litre.
Findings also showed that the refinery has aligned its coastal loading price with the ex-gantry rate at N1,075 per litre, effectively eliminating the previous disparity between coastal and gantry sales.
A senior official at the refinery, who spoke on condition of anonymity because he was not authorised to comment publicly, said the revised pricing regime took immediate effect.
In a significant shift, the refinery has also suspended its 20-member consortium arrangement, opening product loading to all qualified marketers.
According to the source, the move is aimed at deepening market access and ensuring smoother nationwide distribution of petroleum products.
“The consortium arrangement has been cancelled. Loading at both the gantry and coastal terminals is now open to all marketers who meet the necessary requirements. The objective is to deepen market access and ensure seamless distribution of products across the country,” the source added.
Independent checks confirmed the new ex-depot price at N1,075 per litre, raising expectations that retail pump prices could decline in the coming days, especially among filling stations sourcing products directly from the refinery.
Earlier in the week, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, reiterated that fuel prices in a deregulated environment would be determined by market forces rather than government directives.
He stressed that the era of fixed fuel pricing had ended, adding that increased domestic refining capacity would naturally drive competitive pricing and improve energy security.
Similarly, the Nigerian Midstream and Downstream Petroleum Regulatory Authority has consistently maintained that petrol prices must remain cost-reflective under the deregulation framework.
The regulator has also warned operators against profiteering and arbitrary pricing, insisting on adherence to fair competition and transparency.
The Federal Competition and Consumer Protection Commission has also advocated competitive market practices, noting that consumers should benefit from price reductions resulting from improved supply and increased competition.
Despite the latest reduction, industry analysts say petrol prices may not fall below N1,000 per litre in the near term unless importers initiate a price war with the Dangote refinery.
The expectation of further price drops had risen following a decline in global crude oil prices to about $70 per barrel, attributed to the gradual resumption of oil supply through the Strait of Hormuz.
However, domestic fuel prices have remained relatively high, with only marginal reductions recorded, largely driven by the Dangote refinery, which has emerged as the country’s dominant supplier of petrol, diesel and aviation fuel.
Since the fourth quarter of 2024, the refinery has effectively become Nigeria’s price setter, taking over from the Nigerian National Petroleum Company Limited, which previously held that position when it was the country’s primary petrol importer due to the non-functionality of local refineries.
As public calls for lower fuel prices intensify, attention has increasingly turned to the Dangote refinery.
However, a senior official of the Dangote Group has suggested that the Federal Government should instead direct importers to reduce their prices.
The official expressed surprise that importers bringing in reportedly cheaper Russian petroleum products had not reflected lower costs at the pump.
“The Federal Government has been giving huge quantities of import licences for the past few months. And the importers bring cheaper Russian products. So, why are the importers not selling cheaper?” the source queried.
“How can they be waiting for us when their vessels are arriving every day?” he asked.
The source further explained that the refinery’s ability to significantly slash prices is constrained by existing crude oil purchase commitments made at higher prices.
He noted that the refinery holds substantial volumes of crude in storage, while additional shipments are still en route or tied to forward purchase agreements.
“We have huge crude oil storage capacity in our tank farms. There are also shipments at different stages of transit and crude under forward purchases yet to be delivered. So, it is not realistic to expect an immediate crash in fuel prices,” he said.
“The government is giving us small quantities of crude oil. So, we import our crude oil and export our products. It is a difficult situation, not just for consumers but also for the investor,” he added.
Meanwhile, data from the Major Energies Marketers Association of Nigeria indicated that the landed cost of imported petrol stood at N1,023 per litre as of Wednesday, compared to Dangote’s ex-gantry price of N1,075 per litre.
The pricing gap has further fueled debate within the sector, with stakeholders questioning why lower import costs have not translated into reduced retail prices.
As competition intensifies and supply dynamics evolve, market watchers say the trajectory of fuel prices will depend largely on global crude trends, domestic refining capacity, and the responsiveness of importers in a fully deregulated market.
