In a significant move ahead of the festive season, the Dangote Refinery has announced a substantial reduction in the price of Automotive Gas Oil (AGO), commonly known as diesel. The refinery has slashed its gantry price by N40 per litre, bringing the new rate down to N910 per litre from the previous N950.
Crude Oil Price Decline Fuels Diesel Cost Reduction
This price adjustment, representing a 4.21 percent decline, was confirmed by a proforma invoice sighted by industry monitors and took effect immediately. The reduction comes barely a month after the refinery implemented an upward price review on November 6. Energy analysts have directly linked this strategic price cut to a recent softening in international crude oil prices, which has provided refiners with more room to maneuver on output costs.
With global crude cycles easing due to shifting geopolitical tensions, the Dangote Refinery moved swiftly to reflect this shift in the market. The refinery aligned its diesel pricing with the current feedstock realities, a decision that signals a calculated response to changing global and local economic conditions. This temporary stability in the supply chain offers a crucial window for recalibration.
Improved NNPC Supply Chain Supports Price Stability
Another critical factor enabling the price drop is the enhanced operational efficiency at the refinery, bolstered by improved crude supply scheduling from the Nigerian National Petroleum Company Limited (NNPCL). More predictable vessel movements and deliveries have significantly boosted the refinery's domestic crude intake volumes.
This improved access to feedstock has allowed for smoother operations and a steadier supply pipeline, strengthening the refinery's capacity to stabilise diesel availability in the Nigerian market. Such operational consistency is viewed as essential, particularly as the country approaches a period of peak seasonal demand.
Festive Season Relief for Transport and Manufacturing Sectors
The timing of the price slash is strategic, aimed at easing the traditional pressure on Nigeria's industrial and commercial sectors during the Christmas period. Manufacturers, logistics firms, and small businesses that rely heavily on diesel-powered generators and machinery typically face heightened energy consumption and costs at this time of year.
The refinery's decision is expected to provide immediate relief. Lower diesel costs could help reduce haulage rates, ease logistics expenses, and stabilise production costs across the board. This adjustment sets a hopeful tone for end-of-year business operations and reinforces the Dangote Refinery's growing influence in shaping Nigeria's downstream petroleum market dynamics.
This diesel price cut follows closely on the heels of another strategic move by the mega refinery, which recently reduced the ex-depot price of petrol from N843 to N840 per litre to ease travel costs for Nigerians during the yuletide season. These consecutive adjustments highlight the refinery's active role in responding to market signals and seasonal economic needs.
