Dangote Refinery Attributes Fuel Price Drop to Its Price Reduction

A recent decrease in the pump price of premium motor spirit (PMS) by Nigerian petroleum products marketers has been linked to a price cut by Dangote Refinery. The refinery, with a capacity of 650,000 barrels per day, stated that the reduction in fuel prices was a direct response to its decision to lower the gantry price from N877 to N828 per litre. This adjustment, made on November 6, also included a decrease in the coastal price from N854 to N806 per litre.

According to Dangote Petroleum Refinery, the price reduction by oil marketers was not caused by the temporary reversal of the 15% import tariff by the federal government. The company clarified that its price cut led to the subsequent adjustment in pump prices by marketers. However, the Independent Petroleum Marketers Association of Nigeria attributed the price drop to the easing of tension in the downstream sector resulting from the federal government’s suspension of the 15% import duty on petrol and diesel.

The suspension of the import duty was initially intended to support Dangote Refinery. The federal government’s move aimed to alleviate some of the challenges faced by the refinery and the petroleum industry as a whole. The recent developments highlight the complex dynamics at play in the Nigerian petroleum sector, with various factors influencing fuel prices and industry operations.

As the situation continues to unfold, industry stakeholders and consumers alike will be monitoring the impact of these changes on the overall market. The reduction in fuel prices is expected to have a positive effect on the economy, with potential benefits for both businesses and individuals. With Dangote Refinery’s significant capacity and influence in the market, its pricing decisions are likely to have far-reaching consequences for the petroleum sector in Nigeria and beyond.