In a move aimed at easing the financial burden on Nigerians, Dangote Petroleum Refinery and Petrochemicals has announced a further reduction in the price of diesel, cutting it from N1,075 to N1,020 per liter at the gantry price.
The price cut, which was confirmed in a company statement on Tuesday, is the latest in a series of price reductions by Africa’s largest refinery, reinforcing its commitment to stabilizing fuel costs and enhancing energy affordability across Nigeria.
Consistent Price Reductions Since Diesel Production Began
Since Dangote Refinery began diesel production in January 2024, the company has made multiple price reductions. Initially, diesel was priced at N1,700 per liter, but within weeks, the cost was lowered three times, eventually dropping to N1,000 per liter.
The trend of price cuts has extended to petrol as well, with the ex-depot price recently being reduced from N950 per liter to N890 per liter, influencing retail prices across the country. Following this reduction, MRS Oil Nigeria adjusted its pump price to N925 per liter, reflecting the impact of Dangote Refinery’s pricing strategy on the Nigerian fuel market.
Expert Analysis: A N10 Billion Sacrifice for Price Stability
Reacting to the latest diesel price reduction, Development Economist and Public Policy Analyst, Prof. Ken Ife, highlighted the significant financial sacrifices made by the Dangote Refinery. Speaking on national television, he revealed that the refinery absorbed over N10 billion in losses to ensure uniform fuel pricing nationwide during the 2024 yuletide period.
For years, Nigeria’s Petroleum Equalization Fund (PEF) has been responsible for managing price differences and transportation costs across different regions. However, Ife pointed out that the government currently owes marketers over N80 billion in outstanding equalization funds, adding that Dangote’s private-sector intervention has helped mitigate some of these disparities.
A Shift in Nigeria’s Energy Strategy
Beyond price reductions, Dangote Refinery is reshaping Nigeria’s oil industry by reducing reliance on imported refined petroleum products and shifting towards petroleum-based exports.
Traditionally, Nigeria’s fuel industry has been centered around Premium Motor Spirit (PMS), commonly known as petrol. However, the massive refining capacity of the 650,000 barrels per day (bpd) facility is enabling the country to diversify its petroleum output, making refined diesel, jet fuel, and other petrochemicals more readily available for local and international markets.
Implications of the Price Reductions
The downward trend in diesel and petrol prices from Dangote Refinery is expected to have a wide-reaching impact on Nigeria’s economy, particularly in sectors that heavily rely on diesel, such as:
- Transportation & Logistics—Lower diesel costs could lead to reduced transportation fares and cheaper goods as logistics costs decrease.
- Manufacturing & Industries— Many industries rely on diesel generators due to unstable electricity supply. Lower fuel costs could reduce production expenses and increase business profitability.
- Agriculture—Farming equipment and food transportation depend on diesel. A lower cost of fuel may help lower food prices over time.
Conclusion
With fuel price fluctuations being a critical issue in Nigeria, Dangote Refinery’s continued price cuts demonstrate its commitment to stabilizing energy costs and reducing fuel import dependency. By offering more affordable petroleum products, the facility is positioning itself as a key player in Nigeria’s energy transition, while also setting the stage for a more competitive and self-sufficient refining industry in the country.
As the refinery expands its operations, Nigerians will be closely watching to see whether further price cuts or new policy shifts will emerge to drive sustainable energy affordability and economic growth.
