Lagos-based Dangote Refinery has responded to public concerns over the recent hike in the price of Premium Motor Spirit (PMS), attributing the increase to a sharp rise in global crude oil prices.
In a statement issued by Anthony Chiejina, spokesperson for the Dangote Group, the company explained that a 15% surge in crude oil prices, from $70 to $82 per barrel, alongside premiums for Nigerian crude, has significantly impacted fuel costs.
Anthony Chiejina emphasized that while petrol prices in Nigeria have risen to over ₦1,000 per litre in some regions, the refinery has implemented measures to absorb market fluctuations and cushion the impact on consumers.
“While we have made a 5% adjustment to our ex-depot price from ₦899.50 to ₦950 per litre, this is significantly lower than the 15% rise in global crude oil prices.”
Anthony Chiejina, spokesperson for the Dangote Group
The Dangote Refinery also highlighted its efforts to stabilize prices by maintaining the Single-Point Mooring (SPM) ex-vessel price at ₦895 per litre.
“All our partners will offer petrol to Nigerians at a retail price of ₦970 per litre, and we have absorbed approximately 50% of the cost increases in the international oil market.”
Anthony Chiejina, spokesperson for the Dangote Group
The refinery has also absorbed increased logistics costs to maintain uniform pricing across Nigeria’s 36 states and the Federal Capital Territory (FCT).
The entry of Dangote Refinery into Nigeria’s petroleum market has intensified competition, particularly with the Nigerian National Petroleum Company (NNPC), which previously held a monopoly on petrol supply. Observers note that this competition has led to a perceived price war between the two entities.
In December 2024, both Dangote Refinery and the NNPC reduced their PMS prices, providing temporary relief to consumers during the festive season. However, the recent price hike has reignited questions about why the establishment of a local refinery has not resulted in sustained lower petrol prices.
Road Ahead for Nigeria’s Petroleum Industry
The recent price hikes have highlighted the complexities of Nigeria’s petroleum sector and the challenges of achieving price stability in a volatile global market.
As Dangote Refinery continues to compete with the NNPC, some observers believe increased competition could eventually drive down prices in the long term.
However, addressing broader issues, such as currency depreciation and inefficiencies in the distribution system, remains critical for achieving sustainable pricing. Additionally, the government’s role in regulating the sector and fostering transparency will be pivotal in building consumer confidence.
The recent hike in PMS prices underscores the interconnectedness of global oil markets and domestic fuel pricing. While Dangote Refinery has implemented measures to absorb some cost increases, rising global crude prices continue to exert upward pressure on fuel costs in Nigeria.
As the industry navigates these challenges, the entry of Dangote Refinery has introduced a new dynamic, fostering competition and offering the potential for long-term benefits. However, achieving consistent price relief for consumers will require a concerted effort from all stakeholders to address structural inefficiencies and global market volatility.
For now, Nigerians will be closely watching how the refinery and the government respond to these pressing challenges, hoping for a more stable and affordable energy future.
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