The decision by the Dangote Petroleum Refinery to reduce the ex-depot price of Premium Motor Spirit (petrol) on Saturday night came at huge costs to many petroleum marketers, The PUNCH reports.

Marketers who spoke to our correspondent said the sudden price reduction by the Dangote refinery must have been occasioned by the recent warnings that some traders were planning to resort to importation if the foreign PMS remains cheaper than the ex-depot prices of locally refined products.

On Saturday night, the 650,000-capacity refinery told Nigerians that it had reduced its price from N950 to N890 per litre.

“In a bold move to drive economic relief for Nigerians, Dangote Petroleum Refinery has reduced the ex-depot price of Premium Motor Spirit, commonly known as petrol, from N950 to N890 per litre, effective from Saturday.

“This price adjustment is in response to favourable developments in the global energy sector and a significant decline in international crude oil prices. Dangote refinery’s decision reflects its commitment to aligning with market realities and ensuring that consumers benefit from changes in international crude oil prices,” a statement by the Group’s Chief Branding and Communications Officer, Anthony Chiejina, said.

The statement also noted that the price reduction would significantly lower the cost of petrol across the country, generating a positive ripple effect throughout the broader economy.

The refinery has also called on marketers across the country to ensure that the benefits of the reduced price are passed on to the Nigerian public.

However, marketers said the price reduction has both positive and negative effects on their business.

It was learned that some marketers who bought the product a few hours before the announcement would be forced to sell below the cost, incurring debts running into millions of naira.

In an interview with our correspondent, the Vice President of the Independent Petroleum Marketers Association of Nigeria, Hammed Fashola, said the price reduction is a good development but it will surely affect business in negative and positive ways.

Speaking about the negative effect of the reduction, Fashola said, “For instance, maybe a marketer purchased some product on Friday. I am sure the marketer would not have sold it before the new reduction happened. That is the negative aspect of it. But, we have to abide by it. We have to live with it. That is the beauty of deregulation.

“So, we have to be careful when we purchase our product. Where we purchase it from and the price we are getting it. And we must have adequate information on what is going on. So that we will not be losing money every day,” Fashola noted.

He emphasised that when a price reduction happens, the only option a marketer has is to reduce the price so as to let go of old stocks, or else he would be left with no buyers.

“When this happens, the only option a marketer has is to bring down the price. Because if you don’t do that, the competition will set in.

“Some marketers in your neighbourhood might be lucky to get their product tomorrow at N890. So, if you have a N950 product with you, within two to three days, you will not have an option but to bring it down. That is the situation marketers are facing now, but we have to cope with it. It is the marketer who bears the losses,” he stated.

Asked if there is a way to carry all stakeholders along before a major price review to reduce losses, the IPMAN leader replied, “There is no way one can do that in this competitive environment that we find ourselves in now. It is a competition.”

He recalled that some importers have recently threatened to boycott locally refined petroleum products because the imported ones were cheaper, saying Dangote refinery has reacted to that.

“Some marketers and importers were threatening that an imported PMS is much cheaper than a Dangote PMS. So, Dangote is reacting to this with the price reduction. That is the beauty of competition. There is nothing anybody can do about that. You want to sell and I want to sell. I think it is good for the sector.

“It is the public that will gain more because, by this, they will be getting cheaper fuel, which is good. That is what we have been pushing for. It has come. We don’t have to complain,” Fashola maintained.

Asked to speak more on Dangote reacting to the threat to import cheaper fuel, he said, “Of course, Dangote has to react to it. If it doesn’t react this way, if the imported one is cheaper, what will happen? Look at the investment there.

“I am happy it is happening this way. We believe that how can imported PMS be cheaper than Dangote’s PMS that is refined here locally? We know crude is being purchased here in naira, not in dollars; though we know that it is going to be in the official exchange rate, but we won’t be looking for dollars. The issue of transportation will not be there and some other charges too.

“I think we are getting there. We are facing reality. Everybody is facing reality, both big and small. We are all feeling it. It is good for the system,” he added.

On whether the Nigerian National Petroleum Company Limited would bring down its price too, he replied in the affirmative.

“They have to. If they want to remain in business, they have to. It is a reaction and it will go through the chain of supply. If NNPC says they don’t want to reduce their price, who will go there to buy? They have to reduce it.

“It is the same thing happening to the retailers, the marketers, and the filling stations. The same will happen to them. They have to react to the new market realities. Everybody will react to the new development,” he stressed.

Meanwhile, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, also told The PUNCH that the NNPC might reduce its price too as a result of the competition in the market.

“There is an evident possibility that the NNPC will reduce prices,” he told our correspondent on Sunday.

According to him, PETROAN received the news of the Dangote refinery PMS price reduction with excitement because of gains to citizens and the economy.

Gillis-Harry, commended the management of Dangote refinery, saying this price reduction will alleviate the suffering of Nigerians, reduce the cost of living and transportation, and have a positive impact on the economy.

The PETROAN national president reaffirmed that competition is the beauty of a deregulated economy, expressing optimism that other operators of refineries and importers of PMS will reciprocate by reducing the current selling rate of PMS for them to remain in business.

“The reduction in PMS ex-depot price is expected to have a far-reaching impact on the lives of Nigerian citizens. With a decrease in the cost of petrol, the prices of goods and services are likely to decrease, leading to a reduction in the overall cost of living. This, in turn, will provide relief to households, who will have more disposable income to allocate towards other essential needs.

“The reduction in PMS price will also have a positive impact on the economy. A decrease in transportation costs will lead to increased economic activity, as businesses will be able to transport goods and services more efficiently and at a lower cost. Additionally, the reduction in PMS price will lead to an increase in demand for goods and services, which will have a positive impact on economic growth and development,” he said.

Gillis-Harry added that the reduction in PMS price will also have a positive impact on the country’s inflation rate.

In a recent interview with our correspondent, the National Publicity Secretary of IPMAN, Chinedu Ukadike, emphasised that the traders lose billions of naira whenever the prices of petroleum products like PMS and diesel are reduced.

He recalled that the Dangote refinery entered the market in early 2024 and crashed the price of diesel, forcing marketers to sell below their cost of purchase and running into huge debts.

The IPMAN spokesperson maintained that marketers are scared of lifting fuels to avoid collateral losses, having secured loans from banks.

“That is why marketers fear lifting fuel because of the price scare. They will not want to suffer collateral losses.

“Remember that when the Dangote refinery came in, it was reducing prices and marketers were losing money. Did anybody tell marketers not to sell again or that they are going to repay them the money lost? Nobody said so and nobody will say so,” he stressed.

He said marketers were left alone with their losses as they resorted to selling cheaper than they acquired their products.

“It’s like having to sell off because the monetary value of what you have and the interest rate of that will not be able to keep you up. The interest rate is going up faster now,” he noted.

Reports have revealed that between October 1, 2024, and January 31, 2025, the Nigerian National Petroleum Company (NNPC) Limited and select marketers spent over N5.5 trillion on the importation of Premium Motor Spirit (PMS) and diesel (AGO).

Meanwhile, the management of the Dangote Refinery is currently in court with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the NNPC, and other oil marketers, seeking to compel the industry regulator to halt the issuance of import licenses for fuel imports, despite adequate in-country supplies.

THISDAY learned on Friday that between October 1, 2024, and January 31, 2025, the NNPC and some oil marketers spent over N5.5 trillion on petrol and diesel imports, according to port documents.

However, the NNPC has consistently defended its purchasing decisions, stating that they are driven by economic factors, particularly pricing considerations.

“While NNPC prioritises sourcing products from domestic refineries, this is contingent upon economic viability. If local supply is cost-effective, it will be preferred, but the same principle applies to other marketers, who will also evaluate total costs when deciding whether to buy locally or import,” the NNPC said recently, while defending its continuous importation of products.

Industry data analysed on Friday revealed that over 3.2 million metric tonnes of petrol and 980,485 metric tonnes of diesel were imported between October 2024 and January 2025. This amounts to roughly 4.29 billion litres of petrol and over 1.153 billion litres of diesel, with a total cost exceeding N5.5 trillion.

Aside from the NNPC, other importers during this period included BOVAS, Eternal Oil, AA Rano, and others.

Despite the recent restart of the Warri and Port Harcourt refineries and the Dangote Petroleum Refinery becoming operational, imported products arrived through Lagos, Calabar, Warri, and Port Harcourt.

The Dangote Refinery has increased production to 550,000 bpd, sufficient for the Nigerian market and export. However, most crude oil refined at Dangote’s facility is imported due to the national oil company’s failure to meet the local supply agreement.

Under the deal, the Dangote refinery is expected to pay for crude oil in naira and sell the refined products to marketers in naira, eliminating currency and forex risks, while reducing the country’s reliance on the dollar for domestic transactions.

Although Nigerian authorities report an increase in crude oil production, sources from the Dangote Refinery indicate that crude oil supply to the $20 billion facility has actually decreased.

For example, in February 2025, only four cargoes were allocated, and in March, just two cargoes of 950,000 barrels each were booked, totaling 1.9 million barrels for the month.

This represents an allocation of 61,290 bpd, far below the 385,000 bpd target.

Sources close to the Dangote Refinery, preferring to remain anonymous, stated that the refinery continues to sell products to marketers in naira and absorb logistics costs to ensure uniform pricing across the country.

“The refinery has generously assumed an equalisation status, a responsibility typically undertaken by the government. This has been met with enthusiasm by our partners, such as MRS, Heyden, and Ardova.

“The Petroleum Products Retail Outlet Owners Association (PETROAN), recently, entered into an agreement with the refinery to distribute its Premium Motor Spirit (PMS) nationwide at a uniform price across all its filling stations,” one of the sources said.

It was learned that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) allocated only 1.4 million barrels for March. Of this, the NNPC received 17 cargoes (35 percent) of the total production, five were allocated to the Dangote Refinery, two to the Warri Refinery, and three to the Port Harcourt Refinery. Additionally, the remaining seven cargoes were allocated to various financiers as part of loan repayment, with no other local refineries receiving crude allocations for the period.

THISDAY was also told that despite the presidential order to sell crude oil in naira locally, transactions were still partially done using the greenback.

Subsequently, of the five cargoes allocated to the Dangote refinery, two are to be paid for using the local currency, while the remaining three will be settled in dollars from export proceeds.