Dangote Refinery's Price Cuts Spark Concerns Among Fuel Importers

dangote petrol price reduction lagos

Fuel importers are expressing growing concerns as the Dangote Petroleum Refinery announces yet another reduction in petrol prices, according to The PUNCH. The latest price cut, which took effect on February 27, 2025, marks the third reduction in two months, further squeezing profit margins for importers and dealers.

The refinery lowered its ex-depot (gantry) price by N65, bringing the cost of petrol to N825 per litre, down from N890. This follows a previous reduction of N60 earlier in February and a N70.50 cut in December 2024. The move is part of Dangote’s strategy to provide economic relief to Nigerians ahead of the Ramadan season and to support President Bola Tinubu’s economic recovery agenda.

In a statement, the refinery emphasized its commitment to easing the cost of living for Nigerians, particularly during festive periods. “Dangote Petroleum Refinery has consistently lowered petrol prices to benefit Nigerians. This latest reduction is the second in February 2025, following a N60 decrease earlier in the month. In December 2024, we reduced prices by N70.50 during the yuletide season, ensuring Nigerians did not face the usual fuel scarcity and price hikes,” the company stated.

The refinery also highlighted its efforts to stabilize the market, noting that its price adjustments have positively impacted the cost of living and prevented seasonal fuel shortages. Nigerians can now purchase petrol at new prices from Dangote’s partners, including MRS, Heyden, and Ardova, with regional variations ranging from N860 to N895 per litre.

While the price cuts have been welcomed by consumers, fuel importers are feeling the pinch. Many importers, who rely on bringing refined petroleum products into the country, are struggling to compete with Dangote’s lower prices. The landing cost of petrol, estimated at N927 per litre last week, now exceeds Dangote’s ex-depot price, leaving importers with little to no profit margin.

“Dangote’s price reductions are making importation less attractive. While it’s good for consumers, it’s taking a toll on our business,” said one dealer, who requested anonymity. Another retailer echoed this sentiment, suggesting that Dangote’s strategy is aimed at discouraging fuel imports altogether. “Many of us will have to stop importing and source products locally. Dangote should ensure a level playing field for all players in the market,” the retailer added.

Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), acknowledged the challenges faced by importers but praised Dangote’s efforts to stabilize the market. “Dangote is leveraging the advantages of deregulation, and while importers may incur losses, this is a welcome development for Nigerians. We will continue to support Dangote and other local refiners,” Ukadike stated.

He also called on the government to improve distribution infrastructure, such as repairing pipelines and depots, to further reduce costs and ensure seamless fuel delivery across the country. “Our focus now should be on distribution. If the infrastructure is fixed, prices can drop even further,” he added.

Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), also commended Dangote for the price reduction, describing it as a positive step for Nigerians. “N825 per litre is a welcome development. Prices will continue to fluctuate based on economic and environmental factors, but this move benefits everyone,” he said.

Dangote Expands Global Reach with Fuel Exports

In addition to its domestic impact, the Dangote Refinery is making strides in the international market. The refinery recently exported straight-run low-sulphur fuel oil (LSFO) and other feedstock components to Fujairah in the United Arab Emirates. This marks the first such shipment since July 2024, according to industry reports.

LSFO, a byproduct of crude oil distillation, is widely used in industries such as textiles and cement manufacturing, as well as for powering ships in emission-controlled zones. The refinery has also exported aviation fuel to Saudi Aramco, Saudi Arabia’s national oil company, further solidifying its position as a key player in the global energy market.

Aliko Dangote, President of the Dangote Group, highlighted the refinery’s growing output, which now stands at 550,000 barrels per day. “We are meeting our ambitious goals. With over 500 million litres of petrol in stock, worth over N600 billion, we can satisfy Nigeria’s local demand and still export to other countries,” he said.

Dangote also emphasized the refinery’s role in improving fuel quality, noting that its operations have led to the shutdown of less efficient refineries worldwide. “Our refinery is setting new standards, and we are proud to contribute to Nigeria’s self-sufficiency in refined petroleum products,” he added.

As Dangote continues to dominate the domestic market and expand its global footprint, fuel importers are left grappling with the challenges of a shifting industry landscape. While the price reductions benefit consumers, they underscore the need for importers to adapt to a market increasingly shaped by local refining capacity.

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Punch

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