Dangote Petroleum Refinery has announced a further reduction in the ex-depot price of Premium Motor Spirit (PMS), commonly known as petrol, cutting the price by N50 per litre to N1,075 from N1,125. This latest adjustment marks the refinery's fourth petrol price reduction within one month and brings the cumulative decrease in its ex-depot petrol price to N200 per litre since May 30, 2026.
Reasons Behind the Price Cut
The company stated that the reduction reflects its commitment to transferring the benefits of lower production costs to consumers, even as it continues to refine crude oil purchased at significantly higher international prices. Dangote Refinery explained that petroleum product prices cannot immediately reflect daily movements in global crude oil prices because crude oil is typically purchased weeks or months before refining. The petroleum products currently supplied to the market are being refined from crude inventories acquired when international oil prices were substantially higher.
The average landed cost of crude processed stood at about $124.80 per barrel in May and $95.25 per barrel in June, compared with the current international benchmark of around $71.01 per barrel, according to The Nation.
Also Reductions on Diesel and Jet Fuel
Beyond petrol, Dangote Refinery disclosed that it has also reduced the ex-depot price of Automotive Gas Oil (diesel) by N300 per litre and Jet A1 aviation fuel by N520 per litre over the same period. The refinery added that its crude procurement costs are determined using the Dated Brent pricing system, alongside market premiums, freight charges, and logistics costs, making its actual feedstock costs higher than the benchmark Brent crude price.
In a statement, the refinery said: "Today's N50 per litre reduction is the fourth price cut in one month, bringing cumulative reductions to above N200 per litre on PMS. This approach ensures that pricing decisions are anchored on actual production economics and inventory costs rather than short-term fluctuations in international oil markets."
Pricing Strategy and Consumer Relief
Despite higher crude acquisition costs, Dangote Refinery deliberately absorbed a significant portion of the additional expenses instead of transferring the full burden to consumers. The company noted that this strategy has helped keep petroleum product prices in Nigeria lower than those in neighbouring countries, even after taxes are considered. It added that as cheaper crude cargoes gradually enter its refining process, the benefits are being passed on to consumers through phased reductions in petrol prices.
Earlier, Legit.ng reported that the price for aviation fuel (Jet A1) has dropped to N1,650 per litre at Dangote Refinery, representing a N100 or 5.71% reduction from the previous price of N1,750 per litre. This reduction is expected to provide relief for airline operators struggling with rising operating costs, and comes with a 30-day interest-free credit facility.
