By DAYO ADESULU
Dangote Refinery Reduces Petrol Price
The Dangote Refinery has implemented a fresh round of petrol price reduction, quietly slashing the effective cost of Premium Motor Spirit (PMS) to N825 per litre. This latest adjustment comes via a rebate system, allowing marketers to recoup N10 per litre after successful loading at the refinery.
This move, although not publicly announced as an official price slash, reflects a strategic effort by the refinery to maintain market dominance. By underpricing its competitors, the Dangote Refinery reduces petrol price and reinforces its position in Nigeria’s evolving downstream oil sector.
Dangote Refinery Marketers Receive N10 Rebate After Product Loading
According to industry sources on Monday, marketers are still invoiced at the previously announced price of N835 per litre, which was set during the last price adjustment in April. However, upon successful loading and evacuation of the products from the refinery in Lekki, Lagos, they receive a N10 refund.
An insider explained, “The Dangote refinery has started giving a rebate on its products. It’s not an official reduction yet, but the amount is paid back after marketers buy and lift the products.”
This rebate effectively drops the ex-gantry petrol price to N825 per litre, enabling marketers to sell to retailers at more competitive rates between N830 and N835 per litre.
Petrol Price Reduction Strategy Aims to Undercut Competitors
With this rebate mechanism, the Dangote Refinery continues to outpace petrol importers and private depot owners who are struggling to match its pricing model. By making PMS more affordable, the refinery not only strengthens its grip on local supply but also pressures other market players to reconsider their pricing structures.
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The rebate system, while not formalized in public documentation, is serving its purpose. Marketers purchasing from Dangote Refinery can now offer lower retail pump prices, thereby gaining favour among independent filling station operators and end consumers.
Previous Price Drop Preceded by Naira-for-Crude Agreement Restart
This latest development follows two previous petrol price reductions in quick succession by the refinery last month. Within a single week, the ex-depot price dropped by N45 per litre, from N880 to N835.
Those cuts came in the wake of the resumed Naira-for-Crude deal, an arrangement where local refiners like Dangote access domestic crude oil supplies and pay in Naira instead of U.S. dollars. The earlier suspension of that agreement had caused supply disruptions and higher fuel prices.
However, with the agreement reinstated and production fully operational, the refinery is now maximizing its output and pricing strategy to boost domestic availability and affordability of petrol.
No Official Statement Yet from Dangote Group
Despite the market reaction and confirmation from sources, attempts to obtain an official comment from Dangote Group’s spokesperson, Anthony Chiejina, have not been successful. The group has remained silent on the rebate mechanism, which suggests the company may be deliberately keeping the pricing flexibility informal to avoid broader regulatory scrutiny.
Nonetheless, marketers continue to benefit from the discounted rates, which are giving them an advantage in the competitive retail landscape.
Market Implications: Relief for Consumers, Pressure for Importers
The practical outcome of the Dangote Refinery’s petrol price reduction is a shift in market dynamics. With pump prices dipping slightly in various outlets, consumers may experience marginal relief from the high cost of transportation and goods.
At the same time, petrol importers and depot owners who rely on dollar-denominated fuel purchases face increasing pressure. Their higher landing costs prevent them from matching Dangote’s lower prices, reducing their appeal to downstream distributors.
This widening price gap may eventually push more marketers to switch their supply chains entirely to Dangote, especially if the rebate model remains in place or becomes formalized.
Dangote Refinery Shaping Nigeria’s Fuel Market
The 650,000-barrel-per-day capacity Dangote Refinery, which began supplying domestic PMS in early 2024, is quickly becoming a transformative force in Nigeria’s downstream sector. Its ability to process Nigerian crude and supply refined products at scale allows it to influence pricing in a way previously dominated by import-dependent operators.
As the refinery ramps up production and expands distribution, more adjustments in petrol pricing are expected. Industry observers believe the current price movements may only be the beginning of a new era of localized pricing control and consumer-focused supply.
