Nigerian petrol prices projected at N800 following landmark Dangote deal

Motorists across Nigeria could see significant relief at the pumps, with fuel prices projected to plunge toward N800 per litre following a direct distribution agreement between the country’s independent marketers and the Dangote Petroleum Refinery.

The Independent Petroleum Marketers Association of Nigeria (IPMAN) confirmed it has finalized an arrangement to bypass private depot middlemen and lift Premium Motor Spirit (PMS) directly from the refinery in Lagos.

The direct supply chain is expected to restructure retail fuel pricing in the country. Marketers have already initiated an initial price reduction of N125 per litre nationwide as logistics channels begin to clear.

For months, independent retailers—who control the vast majority of filling stations across Nigeria—have complained that exorbitant fees charged by third-party private depot owners kept retail prices artificially high.

The new commercial agreement allows independent operators to plug straight into domestic refining output, lowering the entry cost of replacement stock.

IPMAN’s National President, Abubakar Maigandi Shettima, stated that direct purchasing access changes the entire commercial landscape for domestic energy.

“Reducing the price depends on the way we buy the product from the private depot owners and Dangote refinery,” Shettima explained during an industry meeting in Abuja. “And I thank God now that the Dangote refinery has accepted independent petroleum marketers to start purchasing their product directly. So, it’s a plus.”

“At any time when there is a reduction of price, we are ready to reduce the price to even below N800, not even N900,” Shettima added, indicating that prices will steadily ease as supply lines stabilize. “Likewise, now, we have started reducing the price, if you observe very well. So, the price is coming down, and I assure Nigerians that independent petroleum marketers are ready to crash down the price at a required rate.”

The pricing breakthrough follows intense regulatory pressure from the Federal Government. Despite a steady retreat in global crude oil benchmarks, retail fuel stations across Nigeria had stubbornly maintained elevated pump prices, with fuel selling for as high as N1,296 per litre in several regions.

The Ministry of Petroleum Resources has sharply criticized downstream operators for failing to pass international market savings down to Nigerian households, warning that inventory management must not be used to secure unfair windfall profits.

Heineken Lokpobiri, the Minister of Petroleum Resources (Oil), emphasized that downstream deregulation was never intended to shield excessive margins at the expense of the public.

“Temporary gains realised from inventories acquired at higher prices should not become the basis for sustaining elevated pump prices after replacement costs have declined,” Lokpobiri stated. “As inventories are replenished at lower costs, the benefits of those lower costs should be transmitted to consumers in a timely and transparent manner. That is the essence of a competitive and efficiently functioning market.”

“While considerable progress has been made in moderating inflation from the highs experienced in 2024 at 34 percent, the latest figures show that inflation currently stands at 15.9 percent,” the minister noted, warning that sticky energy costs risk undermining broader economic recovery. “Recently, we have witnessed a welcome easing of those [geopolitical] tensions, which has driven a downward shift and moderation of global crude prices. However, our domestic retail market has not yet harmoniously adjusted to these downward shifts.”

The structural shift comes at a critical time for the Dangote refinery, which recently disclosed spending $4.48 billion on crude oil procurement over a two-month window. The refinery has cut its ex-depot prices multiple times as older, higher-cost crude inventories are gradually replaced by cheaper domestic feedstocks.