Price cut aims to ease inflationary pressures and bring relief to consumers facing high transportation costs
Lagos, Nigeria – April 10, 2025 – The Dangote Petroleum Refinery has announced a reduction in the ex-depot price of premium motor spirit (PMS), commonly known as petrol, from ₦880 to ₦865 per litre. The move is expected to bring marginal relief to consumers struggling under the burden of high fuel prices and inflation.
A refinery spokesperson confirmed the price cut on Thursday, noting that the decision had been communicated to marketers and distributors across the country. The reduction, though modest, represents the refinery’s second price adjustment in recent weeks and reflects its efforts to cushion the economic impact of surging energy costs on ordinary Nigerians.
“The management of Dangote Refinery has notified its partners and stakeholders of the new ex-depot price of ₦865 per litre,” the official said in a press briefing. “This initiative is part of our commitment to promoting price stability and supporting the purchasing power of the average Nigerian.”
Impact on Fuel Distribution and Retail Prices
While the ex-depot price refers to the rate at which petroleum products are sold to marketers at the refinery gate, its effect trickles down to the pump prices paid by end-users. Industry stakeholders say the latest price slash could translate to lower retail prices in some regions, particularly where logistics costs are moderate.
However, marketers caution that several variables—including transportation, storage, and local taxes—will continue to influence final pump prices.
“It’s a positive step, but the impact will depend on how efficiently the supply chain absorbs the difference,” said Bashir Mohammed, a member of the Independent Petroleum Marketers Association of Nigeria (IPMAN). “If logistics and distribution challenges persist, the full benefit may not reach consumers immediately.”
Fuel prices in Nigeria have been highly volatile since the removal of government fuel subsidies in 2023, which exposed consumers to global oil market fluctuations. Since then, the price of PMS has soared across the country, prompting widespread public outcry and placing pressure on policymakers to intervene.
Inflation, Transportation, and Economic Pressure
The high cost of petrol has had a ripple effect on virtually every aspect of life in Nigeria—from the price of food and goods to transportation fares and business overheads. With inflation currently hovering above 30%, economists say the Dangote refinery’s price cut could help slow inflationary momentum, at least in the short term.
“The reduction may not be dramatic, but symbolically and economically, it’s a welcome development,” said Dr. Ifeoma Ajayi, an economist with the Centre for Economic Policy and Development Research (CEPDR). “Any step that eases the cost of transportation and logistics feeds directly into the broader fight against inflation.”
Commercial transport operators, who often cite fuel prices as the primary driver behind fare hikes, have expressed cautious optimism about the new pricing.
“If this reduction reflects at the pump, we might consider adjusting fares slightly,” said Kabiru Usman, a commercial bus driver in Lagos. “But we’ve seen price cuts before that don’t reach us. We’ll wait and see.”
Dangote Refinery’s Growing Influence on Nigeria’s Energy Sector
Commissioned in 2023 and valued at $20 billion, the Dangote Petroleum Refinery is Africa’s largest privately owned refinery. Located in the Lekki Free Trade Zone, the facility has been hailed as a potential game changer in Nigeria’s energy landscape, with a refining capacity of 650,000 barrels per day.
Its operations have gradually reduced Nigeria’s dependence on imported fuel, a long-standing paradox in a country that ranks among the top oil producers globally but has struggled to maintain functioning refineries.
“Dangote’s refinery is critical to achieving energy security in Nigeria,” said Dr. Maikanti Baru, former Group Managing Director of the Nigerian National Petroleum Corporation (NNPC). “Local refining reduces import costs, strengthens the naira, and offers greater control over domestic fuel pricing.”
The recent price adjustment is also seen as a strategic move by the Dangote Group to gain market share and establish price leadership in a competitive and deregulated environment.
Public Reception and Policy Implications
Although many Nigerians remain skeptical of price adjustments that don’t immediately reflect in lower pump prices, the refinery’s decision has been welcomed by advocacy groups and civil society organizations pushing for greater corporate responsibility in the energy sector.
“This is the kind of proactive step we want to see from key players in the industry,” said Nnimmo Bassey, director of the Health of Mother Earth Foundation (HOMEF). “It shows that private sector actors can be sensitive to public welfare, even in a deregulated market.”
The federal government has not issued an official statement regarding the price cut, but officials within the Ministry of Petroleum Resources privately acknowledged the move as a “positive development” that aligns with broader market liberalization goals.
The government has long argued that removing subsidies would pave the way for competition-driven pricing and attract investment in local refining capacity—a vision that the Dangote refinery appears to be advancing.
Challenges Remain Despite Progress
Despite the refinery’s promise and recent gestures, challenges persist in the downstream sector. Distribution inefficiencies, vandalism of pipelines, and fluctuating foreign exchange rates continue to undermine stable fuel pricing.
Additionally, calls for transparency and consumer protection have intensified, with many Nigerians urging the government and private operators to ensure that price reductions are enforced at the retail level.
“We don’t want a situation where a price cut at the depot becomes meaningless at the pump,” said Chioma Udeh, a Lagos-based teacher. “There must be mechanisms to ensure ordinary people benefit.”
The Road Ahead
As the Dangote refinery ramps up operations and output, industry experts believe sustained pricing adjustments could help stabilize Nigeria’s fuel market and curb inflationary trends. However, long-term success will depend on systemic reforms, robust infrastructure, and transparent regulatory oversight.
For now, Nigerians are cautiously hopeful that the refinery’s latest move signals the beginning of more consumer-friendly pricing in an economy where fuel remains a lifeline and a lightning rod for public discontent.
