Dangote’s Price Cuts Shake Nigeria’s Fuel Market
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Petroleum importers in Nigeria are sounding the alarm over the latest price cuts by Dangote Petroleum Refinery, claiming that repeated reductions are undercutting their profit margins and threatening the viability of fuel imports.
On Wednesday, Dangote announced a reduction in the ex-depot price of petrol by N65, bringing it down from N890 to N825 per litre, effective February 27. This marks the second price cut this year and the third in just two months.
According to industry sources, the move is part of a strategic effort to provide relief to Nigerians ahead of Ramadan while supporting President Bola Tinubu’s economic recovery initiatives. Yet, importers say it is creating an uneven playing field, as consumers are naturally drawn to cheaper fuel options.
Importers Feeling the Heat
With the landing cost of petrol hovering around N927 per litre last week—well above Dangote’s new ex-depot price—importers are struggling to compete. Some have warned they may be forced to sell below cost to stay relevant in the market.
“Dangote’s decision to slash prices is good for consumers, but it’s putting pressure on us. We’re selling with little or no profit just to remain competitive,” an importer revealed under anonymity.
Another retailer expressed concern that Dangote’s pricing strategy is designed to discourage fuel imports, potentially pushing many players out of the market. “This latest reduction will further discourage imports. At the end of the day, some of us will have to source our products locally. I just hope Dangote creates a level playing field for all,” the retailer added.
Leveraging Deregulation
Industry experts argue that Dangote is capitalising on Nigeria’s deregulated fuel market. Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), suggested that the refinery’s price cuts are a strategic move to dominate the market.
“Dangote is maximising the advantages of deregulation. Every time importers try to bring in cheaper fuel, Dangote lowers his prices, leaving them in a bind,” Ukadike said.
However, Ukadike also praised the refinery’s efforts, noting that IPMAN will continue to support Dangote’s operations. “We will keep buying from Dangote through MRS and other partners. It’s a win for independent marketers and consumers alike,” he added.
Strategic Price Cuts Amid Growing Output
Dangote’s management justified the price reductions as a way to ease the cost of living for Nigerians. The refinery first reduced petrol prices in December 2024, cutting rates by N70.50 during the yuletide season.
The company’s statement explained that the latest adjustment aims to stabilise domestic supply and support the government’s economic policies. “This initiative will alleviate the financial burden on Nigerians while contributing to the broader economic recovery plan,” it read.
Despite concerns from importers, the price cut is welcomed by consumers and industry associations. Billy Gillis-Harry, President of the Petroleum Products Retail Outlet Owners Association of Nigeria, commended the move, saying, “Nigerians are better for it. The price of N825 per litre is a relief, and we salute Dangote for this initiative.”
Shaking Up Global Markets
Meanwhile, Dangote’s impact is being felt beyond Nigeria’s borders. The refinery recently exported straight-run low-sulphur fuel oil to Fujairah in the UAE and sold jet fuel cargoes to Saudi Aramco. This marks a significant milestone for the company, which now produces 550,000 barrels per day, meeting Nigeria’s domestic demand and boosting exports.
Aliko Dangote, President of the Dangote Group, boasted of the refinery’s growing influence, saying, “We have more than half a billion litres of petrol in our tanks today, worth over N600bn. Our refinery is producing enough to satisfy Nigeria’s needs and supply international markets.”
With its aggressive pricing and increasing output, the Dangote refinery is not just reshaping Nigeria’s fuel market but also positioning itself as a key player on the global stage. However, the question remains: at what cost to local importers and the broader competition?
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