Global crude oil prices have retreated sharply from the highs recorded in May, yet petrol and diesel prices at Dangote Petroleum Refinery remain significantly above levels seen when international oil benchmarks traded near current levels earlier in the year.
Brent crude ended the week at $87.33 per barrel, down 3.37 percent, while U.S. West Texas Intermediate (WTI) settled at $84.88 per barrel, a decline of 3.23 percent. The latest Brent settlement represents its lowest level since early March, as optimism over a potential diplomatic breakthrough between the United States and Iran continued to weigh on the market.
The current price level is considerably below the highs reached during the recent Middle East-driven rally. Brent traded at approximately $113.70 per barrel on May 4, while WTI stood at $104.90 per barrel. Earlier in May, Brent was above $107 per barrel, while WTI briefly approached $100 per barrel.
From its May high to Friday's close, Brent has shed approximately 23.2 percent, while WTI has fallen about 19.1 percent, marking one of the sharpest corrections in global oil markets this year.
The decline has been driven largely by easing concerns over supply disruptions in the Middle East following reports that negotiations between Washington and Tehran have progressed toward a framework agreement that could eventually restore normal shipping activities through the Strait of Hormuz, a critical route for global energy supplies.
While crude prices have retreated significantly, domestic fuel pricing has not moved at the same pace.
The contrast is particularly evident when compared with market conditions in early March. On March 2, Brent crude traded at $77.60 per barrel, while Dangote Petroleum Refinery increased its ex-depot petrol price from ₦774 per litre to ₦874 per litre, a rise of ₦100. A day later, the refinery raised its diesel gantry price by ₦170, moving from ₦880 per litre to ₦1,050 per litre.
Since then, international oil prices have climbed sharply, reaching a peak of about $113.70 per barrel in early May. During the same period, Dangote’s petrol gantry price rose further to ₦1,275 per litre, while diesel reached ₦1,800 per litre.
However, as crude prices subsequently reversed course, reductions in refinery prices have been comparatively limited.
Dangote later reduced its petrol gantry price to ₦1,250 per litre, representing a decline of about 2 percent from the ₦1,275 peak. Diesel prices were also adjusted downward from ₦1,800 per litre to ₦1,700 per litre, a reduction of about 5.6 percent.
Despite these reductions, current refinery prices remain substantially above March levels. Petrol is still approximately 43 percent higher than the ₦874 per litre price recorded in early March, while diesel remains roughly 62 percent above the ₦1,050 per litre level prevailing at the time.
The disparity has become a growing concern among depot operators, fuel retailers, and marketers.
Industry participants note that international crude prices were a major factor cited during successive fuel price increases earlier this year. With Brent now trading close to levels seen before the May rally, many marketers argue that a stronger downward adjustment in ex-depot prices would help ease pressure across the downstream supply chain.
Several marketers who spoke to Petroleumprice.ng said many operators continue to grapple with expensive inventories acquired during the peak pricing cycle, while elevated borrowing costs and weak margins have increased financial strain across the sector.
They contend that lower gantry prices would improve stock turnover, support retail profitability, and provide some relief to consumers facing persistent energy costs.
Analysts, however, caution that refinery pricing is influenced by more than crude oil alone. Factors such as feedstock acquisition costs, foreign exchange volatility, financing expenses, logistics costs, and inventory replacement strategies also play important roles in determining ex-depot prices.
Nevertheless, with Brent now trading at its lowest level since March and more than 23 percent below its May peak, attention across the downstream market is increasingly turning to whether continued weakness in global oil prices will result in deeper reductions in domestic petrol and diesel prices in the coming weeks.