The Dangote oil refinery is set to take a significant financial hit, losing an estimated N32.5bn following its recent price reduction on Premium Motor Spirit, according to The PUNCH.
President of the Dangote Group, Alhaji Aliko Dangote, had recently disclosed that the refinery had accumulated over 500 million litres of petrol in its storage tanks at a time when it was retailing at N890 per litre. At this rate, the total worth of the stock was projected at N445bn.
However, the refinery later announced a N65 reduction in the ex-depot price of PMS, bringing it down to N825 per litre from February 27, 2025.
This marked the second price cut of the year, with an earlier reduction of N60 also occurring in February.
In a statement issued in February, the refinery highlighted its commitment to easing the cost of living for Nigerians.
“It is important to note that Dangote Petroleum Refinery has consistently lowered the prices of petrol and other refined petroleum products to the benefit of Nigerians. This marks the second price reduction of PMS in February 2025, following a previous decrease of N60 earlier in the month.
Additionally, in December 2024, during the yuletide period, the refinery reduced the price of PMS by N70.50, from N970 to N899.50 per litre, as part of its commitment to easing the cost of living and providing relief to Nigerians during the holiday season. This reduction has positively impacted the overall cost of living, benefiting various sectors of the economy, and has also ensured that Nigerians did not experience the perennial fuel scarcity and price hikes typically associated with the yuletide season.”
Selling the 500 million litres at the new price of N825 per litre means the refinery’s projected revenue from this stock will drop to N412.5bn, effectively reducing its expected earnings by N32.5bn.
Industry analysts suggest that factors such as the recent decline in crude oil prices and the naira’s marginal appreciation against the dollar could help Dangote Refinery offset these losses.
Meanwhile, fuel importers and marketers have raised concerns over the persistent price reductions by the refinery, lamenting that their margins have been severely impacted.
Many importers, who have been forced to sell at lower rates to remain competitive, estimate their collective losses to be around N2.5bn daily and N75bn monthly due to the latest price cut.
Marketers holding old stock also reported incurring heavy financial setbacks. Despite these losses,
The PUNCH confirmed that several filling stations have adjusted their pump prices to below N900 per litre in response to the refinery’s price drop.
For instance, NNPC retail stations in Lagos have lowered their prices to N860 per litre.
As consumers welcome the price reductions, they have called on Dangote Refinery to expand the distribution of its petroleum products by increasing the number of filling stations nationwide.
Meanwhile, industry projections suggest that petrol prices could drop further to N800 per litre, as the current landing cost is estimated at N783.66 per litre, according to the Major Energies Marketers Association of Nigeria.
