Energy filling stations in Nigeria have yet to lower petrol costs despite the recent N25 per litre price reduction announced by Dangote Petroleum Refinery. The refinery cut its ex-depot petrol price from N1,275 to N1,250 per litre, and also reduced diesel prices from N1,800 to N1,700 per litre.
Market Response Limited
A market survey conducted by Daily Champion revealed that only a few retail outlets adjusted their prices downward, with reductions ranging between N5 and N10 per litre. Consequently, consumers have not experienced the full benefit of the refinery's latest price review.
Industry stakeholders attribute the muted response to ongoing inefficiencies within the downstream petroleum sector. Reductions in depot prices do not always lead to immediate decreases at filling stations.
Factors Delaying Price Transmission
Market analysts point to several factors contributing to the delay. These include existing fuel stocks purchased at higher prices, transportation and logistics costs, distribution expenses, and varying pricing strategies adopted by marketers.
The development has reignited concerns about the lack of effective monitoring systems capable of ensuring that cost reductions at the supply stage are transferred to consumers.
Deregulation and Competition
Experts note that although Nigeria's downstream petroleum market operates under a deregulated framework, greater transparency and stronger competition remain essential for efficient price transmission across the value chain. Without these conditions, consumers may continue to experience delayed benefits whenever wholesale fuel prices decline.
Increased fuel imports and greater product availability are driving the price war, forcing suppliers to closely monitor and adjust their pricing strategies.
Dangote Refinery Expansion Plans
Meanwhile, Dangote Refinery plans to increase the number of crude oil grades it can process from about 40 to 130 as part of an expansion project. The expansion aims to double the refinery's capacity to 1.4 million barrels per day and make it more competitive in global energy markets.
The refinery expects lower operating costs, greater flexibility in sourcing crude from different countries, and stronger long-term export partnerships.
