Petrol Prices Set to Ease as Dangote Refinery Cuts Ex-Depot Rate to N1,175
Pump prices of premium motor spirit are expected to fall to between N1,200 and N1,250 per litre in the coming days after the Dangote Petroleum Refinery slashed its gantry price by N75, marketers said on Tuesday.
The refinery reduced its ex-depot rate from N1,250 to N1,175 per litre, citing a sharp decline in global crude oil prices following a peace agreement between the United States and Iran that has calmed tensions in the Middle East. Other depot owners have responded by lowering their prices to around N1,180, according to industry pricing platform Petroleumprice.ng.
Retail prices at filling stations, however, have yet to adjust, with many outlets still dispensing petrol at about N1,280 per litre as dealers work to exhaust higher-cost inventory.
In a circular issued to fuel marketers on Monday, the Dangote refinery explained that the price review reflected the de-escalation of hostilities that had roiled energy markets for three months.
“Following the de-escalation of tensions in the Middle East, which has impacted energy prices, we wish to inform you that we have reviewed our premium motor spirit gantry/coastal price,” the circular read. It stated that the new gantry price is N1,175, while the coastal price per metric tonne has been reduced from N1,595,790 to N1,495,215. The rates took effect from midnight on Tuesday, with all outstanding unloaded volumes to be repriced at the new level.
The adjustment comes as oil prices, which surged past $120 per barrel at the height of the crisis, fell below $80 per barrel on Tuesday. Brent crude, the global benchmark, dropped from $87 on Sunday to $78 after the US and Iran signed a ceasefire deal that included the reopening of the Strait of Hormuz.
National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, said retail prices in Lagos could settle between N1,200 and N1,250 per litre, while locations farther from supply hubs may see prices around N1,300. He urged consumers to be patient, explaining that an immediate drop at the pumps was unlikely as stations clear older, higher-cost stock.
“This announcement is enabling people who have old stocks to clear out their stocks and prepare to take fresh stocks,” Ukadike said. “Once the Dangote refinery announces a new price, there is a serious pause in loading. It will enable people who just bought new products to clear the old stocks within a day or two. Then when the new stocks start coming into the market, the process of supply and price will set in. By tomorrow and Friday, people will start adjusting to the new price.”
Not all industry voices welcomed the extent of the reduction. Joseph Obele, spokesman for the Petroleum Products Retail Outlet Owners Association of Nigeria, raised concerns that imported fuel now appears cheaper than locally refined products and called on the Nigerian Midstream and Downstream Petroleum Regulatory Authority to issue more import licences. Some consumers on social media echoed that sentiment, arguing that the N75 cut does not fully reflect the steep decline in crude oil costs.
Crude oil, the primary feedstock for fuel production, had climbed sharply after hostilities between the United States and Iran broke out on 28 February. During the three-month conflict, prices exceeded $100 per barrel and touched $120, driving domestic petrol prices from about N830 per litre to roughly N1,300. Diesel and aviation fuel also posted substantial increases. With crude now retreating, further relief at the pumps is anticipated, though a Dangote refinery official cautioned that the facility is still processing “expensive crude” already held in its tanks, which may moderate the pace of additional price reductions.