Dangote Refinery slash petrol price hits N1,075/litre after fourth cut in one month 

Dangote Petroleum Refinery has slashed the ex-depot price of Premium Motor Spirit (PMS) for the fourth time in one month, taking cumulative reductions to more than N200 per litre and signalling that further price cuts may be on the way as cheaper crude oil cargoes begin to replace expensive inventories.

The latest N50 per litre reduction comes as international crude oil prices have retreated sharply from their recent highs, allowing Africa’s largest refinery to gradually pass lower feedstock costs on to consumers after months of absorbing elevated crude procurement expenses.

In a detailed statement issued late Wednesday, the refinery said the latest adjustment forms part of a phased pricing strategy anchored on actual production economics rather than daily movements in international oil benchmarks.

“Today’s N50 per litre reduction is the fourth price cut in one month, bringing cumulative reductions to above N200 per litre on PMS. This approach ensures that pricing decisions are anchored on actual production economics and inventory costs rather than short-term fluctuations in international oil markets,” the company said.

The latest reduction strengthens competition in Nigeria’s deregulated downstream petroleum market, where marketers have increasingly adjusted pump prices in response to changes in refinery ex-depot prices.

Refinery explains pricing strategy

The refinery sought to address growing public expectations that domestic fuel prices should immediately mirror declines in Brent crude prices.

According to Dangote, refinery pricing does not move in tandem with daily international crude quotations because crude oil is purchased weeks—and in some cases months—before it is processed.

“It is important to clarify that refinery pricing does not move in tandem with daily international crude oil quotations. Crude oil is procured weeks, and in some cases months, before it is processed, under commercial contracts linked primarily to monthly average pricing mechanisms rather than prevailing spot market prices,” the company said.

It added that refinery feedstock is purchased not simply at headline Brent prices but on a Dated Brent basis, with additional market premiums, freight and logistics costs that materially increase the actual landed cost of crude.

Dangote reveals crude costs

In an unusual move aimed at improving transparency, the refinery published detailed records of crude cargoes discharged in May and June to demonstrate the cost pressures under which recent fuel supplies were produced.

The documents show that the refinery received 24 crude cargoes in May totalling 21.47 million barrels, with a combined landed value of approximately $2.68 billion, translating to an average landed cost of $124.80 per barrel.

By comparison, 21 cargoes received in June amounted to 18.93 million barrels, costing about $1.80 billion, with the average landed cost declining to $95.25 per barrel.

Those figures remain significantly above the current Brent benchmark of around $71 per barrel, according to the refinery.

“Consequently, the petroleum products currently being supplied from our refinery are being produced from crude inventories acquired at substantially higher costs than today’s market prices,” the statement said.

The refinery said the crude oils processed include Nigerian grades such as Bonny Light, Qua Iboe, Escravos, Forcados, Amenam, Agbami and Bonga, alongside imported grades including Cabinda, El Sharara and CJ Blend.

Absorbing costs to stabilise prices

Rather than immediately transferring higher feedstock costs to consumers during the recent spike in global crude prices, Dangote said it deliberately absorbed a substantial portion of the increase to cushion Nigerians from extreme market volatility.

“Notwithstanding these elevated feedstock costs, Dangote Petroleum Refinery did not immediately transfer the full impact of rising crude prices to the Nigerian market. Instead, the refinery absorbed a substantial portion of the increase in order to support market stability, reduce inflationary pressures and shield consumers from the extreme volatility witnessed in global energy markets.”

The company argued that this strategy has helped keep petroleum prices in Nigeria below those in several neighbouring countries despite differences in tax regimes.

More price cuts expected

Dangote indicated that the latest reduction may not be the last.

According to the refinery, lower-cost crude cargoes are progressively entering its production cycle, meaning refined products manufactured in the coming weeks should benefit from cheaper feedstock.

“As procurement costs continue to decline and lower-priced inventories replace higher-cost crude stocks, Nigerians can expect further price moderation, provided international market conditions remain favourable,” it said.

The refinery maintained that the objective remains to supply internationally compliant petroleum products at competitive prices while strengthening Nigeria’s energy security.

“Nigeria today benefits from the stabilising role of domestic refining capacity. The Dangote Petroleum Refinery currently supplies volumes sufficient to meet national demand, helping to strengthen energy security, eliminate dependence on imports, conserve foreign exchange and provide greater price stability for consumers and businesses.”

The latest price adjustment comes as competition intensifies in Nigeria’s downstream market following the full deregulation of petrol pricing, with marketers closely tracking ex-depot prices from both Dangote Refinery and other suppliers.

For consumers, the continued reductions offer the prospect of lower pump prices if marketers fully pass on the refinery’s latest ex-depot cut, while the refinery’s disclosure of its crude procurement costs provides fresh insight into the economics driving fuel pricing in Nigeria’s post-subsidy era.