Dangote Petroleum Refinery has reduced the depot price of petrol by ₦100 per litre after global crude prices fell on Monday, offering potential relief to Nigerian fuel marketers and motorists following days of steep increases.
The refinery said its wholesale price for petrol has been cut to ₦1,075 per litre, down from ₦1,175, according to a pricing template released on March 10.
Petrol supplied through coastal distribution will now sell for ₦1,050 per litre, while the price of diesel has been reduced to ₦1,430 per litre, from the previous ₦1,620.
The refinery said the prices exclude charges imposed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The price reduction comes a day after global crude oil prices retreated from recent highs driven by geopolitical tensions.
International benchmark crude had surged close to $120 per barrel on Monday before falling back to near $90 as market fears of a prolonged Middle East conflict eased.
Because domestic fuel prices in Nigeria are now largely market-driven following the removal of petrol subsidies, changes in global oil prices often feed through to refinery and depot pricing.
Retail Prices May Take Longer to Fall
Despite the reduction at the refinery gate, consumers may not see immediate price cuts at filling stations.
Energy analysts say petrol prices typically fall more slowly than they rise because fuel marketers must first sell inventory purchased at earlier, higher prices.
“Petrol prices are fast to rise but slow to fall because sellers will want to sell the fuel they have already bought at a higher cost before reducing charges,” Alberto Bellorin, an analyst at InterCapital Energy, told the BBC.
He noted that while falling oil prices provide some relief, the effect at the pump may take time to materialise.
Another analyst, Park Kee Hyun of the S. Rajaratnam School of International Studies, said uncertainty in global energy markets remains high.
Fuel prices could remain volatile as companies build a risk premium into shipments to hedge against possible supply disruptions, he said.
Executives at the Dangote Refinery said the facility remains fully exposed to international market dynamics despite operating in Nigeria.
Managing Director David Bird said on Monday that Nigerian crude supplied under the country’s crude-for-naira arrangement is still purchased at international benchmark prices rather than at discounted rates.
He added that the refinery also faces rising costs linked to freight, insurance and financing.
Shipping costs alone have surged dramatically, with tanker freight rising from about $800,000 per cargo to roughly $3.5 million during the recent market volatility, he said.
The Dangote facility, which has a refining capacity of about 650,000 barrels per day, is the largest single-train refinery in Africa and plays a critical role in Nigeria’s efforts to reduce reliance on imported fuel.
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