Key points:
- Petrol price drops to ₦860 per litre after refinery cuts
- Dangote Refinery drives competition in fuel pricing
- Economic relief comes amid high living costs
THE price of petrol in Nigeria has dropped to N860 ($0.57) per litre, bringing some relief to consumers grappling with high living costs. The decline follows price reductions by the Dangote Refinery, a major local fuel producer, which has adjusted its depot prices twice in February.
As reported by Agence France-Presse (AFP), the Nigerian National Petroleum Corporation Limited (NNPC) responded shortly after, announcing its own price cut on Tuesday. This marks a significant shift in a country where petrol prices had skyrocketed due to subsidy removal and currency depreciation.
Local refinery ends Nigeria’s dependence on imports
Despite being one of Africa’s top oil producers, Nigeria has historically relied on imported fuel due to its underperforming state-owned refineries. The situation worsened when President Bola Tinubu ended decades-long fuel subsidies, leading to a fivefold increase in prices.
In May 2023, before the subsidy removal, petrol sold for N195 per litre. By October 2024, prices had surged to N
998 per litre in Lagos and N1,030 in Abuja, with some areas seeing prices as high as N1,300. The cost spike contributed to an economic crisis, making fuel unaffordable for many Nigerians.
The Dangote Refinery, which began operations in September 2024, has since played a pivotal role in stabilising prices. In a statement last week, the refinery—owned by Africa’s richest man, Aliko Dangote—said the latest price reduction was aimed at providing financial relief to Nigerians, especially during Ramadan.
Fuel market competition driving prices down
Industry analysts suggest the price cut is part of a broader strategy by Dangote Refinery to secure its place as the dominant player in Nigeria’s fuel market.
‘Nigerians can expect this trend to continue until Dangote Refinery achieves market dominance and other marketers struggle to compete,’ said Ademola Adigun, managing director of AHA Strategies Ltd, in an interview with AFP.
However, Dangote Refinery has denied allegations that it is seeking to create a monopoly. Other factors influencing the price drop include currency stability and lower global crude oil prices, according to Ikemesit Effiong, a partner at SBM Intelligence.
‘If the naira had depreciated further against the dollar or if crude oil prices had risen, petrol prices would have increased instead of dropping,’ Effiong told AFP.
A sign of a deregulated fuel market?
The decline in fuel prices may also indicate that Nigeria’s deregulated fuel market is working, according to Clement Isong, president of the Major Energies Marketers Association of Nigeria (MEMAN).
‘Competition is having an effect, and the new price reflects current import parity levels. Many MEMAN members, including NNPC Retail, MRS,
Conoil, Ardova, Total, and Mobil, source a bulk of their fuel from Dangote Refinery,’ he told AFP.
With Dangote Refinery’s growing influence in fuel supply, the Nigerian market could see further price adjustments in the coming months. However, consumers remain cautious, as global energy trends and local economic factors could still drive fuel costs higher.
