Nigerians have widely commended Dangote Refinery for its recent decision to reduce the selling price of petrol, a move that many believe will bring significant relief to motorists and businesses across the country.
As the news of the price cut spread, numerous citizens took to social media to express their gratitude, praising the refinery’s management for responding to the economic realities facing Nigerians. However, many also emphasized the need for sustainability, urging the refinery to maintain the reduced price in the long term to ensure a lasting positive impact on the economy.
Dangote Refinery announced a reduction in its ex-depot (gantry) price of Premium Motor Spirit (PMS), commonly known as petrol, from N950 per litre to N890 per litre, effective February 1, 2025. The company’s Group Chief Branding and Communication Officer, Anthony Chiejina, disclosed this in a statement on Saturday night.
According to Chiejina, the latest price reduction is in response to global energy market trends and a recent decline in international crude oil prices. “Dangote Petroleum Refinery firmly believes that this reduction will result in a meaningful decrease in the cost of petrol nationwide, thereby driving down the prices of goods and services, as well as the overall cost of living, with a positive ripple effect on various sectors of the economy,” he stated.
The new pricing means that marketers will now buy petrol from Dangote at N890 per litre. However, they will still factor in additional costs, including transportation and profit margins, to determine the final pump price for consumers. The reduction is expected to lower the retail price from about N1,000 per litre to approximately N950 per litre at filling stations that source their supply from Dangote Refinery.
While the price cut has been met with widespread applause, industry experts and stakeholders have pointed out some challenges in ensuring immediate price adjustments at retail outlets.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) acknowledged the price reduction but noted that it might not lead to an instant drop in pump prices nationwide. PETROAN’s National President, Billy Gillis-Harry, explained that many filling stations still have fuel purchased at the previous higher price, making it difficult to immediately adjust their retail prices.
“Price changes are not usually instantly applicable, but ultimately, they will be reflected at fuel stations,” Gillis-Harry stated. He urged petrol marketers to transfer the benefits of the price cut to consumers as soon as they start purchasing at the new rate. PETROAN also reiterated its commitment to collaborating with Dangote Refinery and other stakeholders to ensure fair pricing and long-term sustainability in Nigeria’s downstream petroleum sector.
Many economic analysts have also weighed in, emphasising that competition in the petroleum market is crucial to driving down prices. According to industry experts, the revitalization of local refineries like Dangote’s has significantly contributed to reducing Nigeria’s dependence on fuel imports and preventing the circulation of adulterated petroleum products.
Economic analysts believe the price reduction could play a crucial role in stabilizing Nigeria’s economy, particularly in controlling inflation and improving energy security.
According to economic consultant and CEO, CFC Advisory Tilewa Adebajo, Dangote Refinery’s pricing strategy could help curb inflation by ensuring a steady supply of refined petroleum products at competitive prices.
“The economic management in this country is at a critical point. The success of Dangote’s refinery project can actually help reduce inflation and stabilize supply in the energy sector,” Adebajo stated.
Similarly, Dr. Muda Yusuf, Chief Executive Officer of the Center for the Promotion of Private Enterprise (CPPE), noted that market dynamics will eventually force other petrol stations to lower their prices.
“What you are seeing in the price ‘war’ is the beauty of competition. The best way to protect consumers from exploitation is through healthy competition,” Yusuf said. He added that stations yet to adjust their prices might be selling off older stock purchased at higher rates but will be forced to reduce prices as consumers seek cheaper alternatives.
“If a station refuses to lower prices, customers will go elsewhere, leading to a loss in sales. Eventually, market forces will compel all stations to follow suit,” he explained.
Despite the price cut, many commuters have reported that transportation costs remain unchanged. At Berger Bus Stop, Lagos, commuter Tosin Ogunye attributed this to increased demand due to the festive season.
“The price of fuel has been reduced, but transport fares are still high. The government may need to intervene and encourage transport operators to pass the benefits on to commuters,” Ogunye stated.
Others have expressed concern about the frequent fluctuations in fuel prices, which they believe make it difficult for the economy to adjust and fully benefit from price reductions.
Public affairs analyst and former banker Dr. Damian Duke outlined several economic benefits of lower fuel prices. According to him: Reduced fuel costs translate to lower operational expenses for businesses, enabling them to reinvest, expand, and create jobs; With lower fuel costs, consumers have more disposable income, allowing them to spend on other goods and services, thereby stimulating the economy; Lower fuel prices reduce transportation costs, which are a major component of consumer prices, helping to curb inflation; Reduced transportation costs provide financial relief to low-income households, improving their standard of living;Affordable fuel encourages people to travel more frequently, benefiting sectors like tourism and hospitality.
Also, when fuel is cheaper, individuals may be more inclined to invest in fuel-efficient vehicles, contributing to a reduction in carbon emissions.
While the recent price cut has been well-received, Nigerians are calling for sustainability to ensure long-term economic benefits. Many argue that frequent price fluctuations make it difficult for businesses and individuals to plan effectively.
Economists suggest that a more structured pricing model could help stabilize fuel prices and prevent sudden increases that negatively impact the economy. Stakeholders also urge the government to implement policy measures that encourage competition in the downstream sector, ensuring fair pricing and steady supply.
The reduction in Dangote Refinery’s petrol price has been met with optimism and cautious hope. While it offers immediate relief to motorists and businesses, concerns remain about its long-term sustainability and impact on transportation costs.
As the refinery and marketers navigate the complexities of the industry, Nigerians are hopeful that competition and government oversight will lead to a more stable and consumer-friendly petroleum market.
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