Dangote Refinery Reveals Why Petrol Prices Haven’t Dropped In Nigeria

The Dangote Petroleum Refinery has explained why recent declines in global crude oil prices have not immediately translated into lower petrol prices in Nigeria, stating that its pricing model is driven by actual production costs and previously acquired crude oil inventories rather than daily movements in the international oil market.

According to a statement issued by the refinery on Thursday, the company said its pricing decisions are based on commercial realities, as crude oil used for refining is purchased weeks or even months before production under contractual arrangements linked to monthly average prices instead of spot market rates.

The clarification comes amid growing public concern over the slow reflection of falling global petroleum prices in Nigeria’s domestic fuel market. The refinery maintained that it remains committed to ensuring Nigerians benefit from favourable market conditions through fair, responsible and sustainable pricing of petroleum products.

The company disclosed that it has reduced the ex-depot price of Premium Motor Spirit (PMS) by more than ₦200 per litre since May 30, 2026. It also said the price of Automotive Gas Oil (diesel) has been reduced by ₦300 per litre, while Jet A1 aviation fuel has recorded a reduction of ₦520 per litre within the same period.

The refinery noted that these reductions were implemented despite processing crude oil purchased when international prices were significantly higher than current market levels, describing the move as evidence of its commitment to transferring cost efficiencies to consumers while maintaining operational and financial sustainability.

Providing further insight into its pricing structure, the company explained that petroleum products currently being supplied are refined from crude inventories acquired at substantially higher costs. It revealed that the average landed cost of crude processed stood at approximately $124.80 per barrel in May and $95.25 per barrel in June, compared to the current international benchmark price of about $71.01 per barrel.

The refinery also stressed that its crude oil purchases are not based on the widely quoted ICE Brent benchmark alone but include additional market premiums, freight charges and logistics costs, resulting in significantly higher landed costs than headline international prices suggest.

It added that rather than passing the full impact of increased crude costs to consumers, it absorbed a significant portion of the additional expenses to help maintain market stability, ease inflationary pressures and protect Nigerians from the sharp volatility experienced in global energy markets.

The company further stated that fuel prices in Nigeria remain competitive compared to neighbouring countries after taxes are taken into account.

According to the refinery, a phased reduction in fuel prices has already commenced as lower-cost crude cargoes gradually enter its production cycle. It noted that the latest ₦50 per litre reduction represents the fourth downward price review within one month, bringing cumulative reductions in the ex-depot price of PMS to over ₦200 per litre.

The refinery maintained that this gradual approach ensures pricing reflects actual production economics and inventory costs instead of reacting to short-term fluctuations in international crude oil prices.

It also highlighted the growing importance of domestic refining, stating that its current production capacity is sufficient to meet Nigeria’s fuel demand, strengthen energy security, reduce reliance on imported petroleum products, conserve foreign exchange and provide greater price stability for consumers and businesses.

The company expressed optimism that fuel prices would continue to decline as lower-cost crude inventories replace existing higher-priced stock, provided global market conditions remain favourable.