Global crude oil prices have fallen to about $60 per barrel, yet the Dangote Refinery has not significantly reduced its petrol prices. This price rigidity has raised concerns among market players and regulators. While global trends suggest local pump prices should fall, the refinery maintains high rates. This decision increases domestic costs, weakens competitive positioning, and fuels a rise in petrol imports.
Crude Drops, but Dangote Cuts Slightly
Earlier in April, Brent crude hovered around $75 per barrel. At that time, the refinery’s gantry price ranged between ₦880 and ₦865 per litre. After crude prices dropped nearly 20% to $60 per barrel, the refinery lowered its petrol price by only 1.7%. This slight decrease reflects a disconnect between international trends and the refinery’s local pricing.
Meanwhile, global petrol benchmarks like the Euro-spec market saw significant drops. Prices fell by almost 18%, from $734.25/MT to $603/MT. However, the refinery’s truck price moved marginally, prompting importers to bring in cheaper products. These imports reduce the refinery’s market influence and threaten its goal of curbing Nigeria’s fuel import dependence.
Retailers Undercut Dangote
Independent retailers are now undercutting Dangote’s partner stations. In Ogun State, for example, SGR sells petrol at ₦878 per litre. MRS and Heyden offer prices between ₦885 and ₦890, either matching or beating refinery-linked outlets.
Even depot owners with fewer operational advantages offer competitive prices. These independents lack Dangote’s integrated control over refining, tank farms, and distribution. Despite this, they can price similarly. The refinery, with its full value chain control, should lead in price competitiveness, but currently does not.
Fuel Imports Rebound
The refinery’s slow price adjustments have triggered a resurgence in petrol imports. Importers exploit price gaps and ship products into Nigeria and West Africa. Import volumes are the highest seen in two years, with about four million metric tonnes expected by April 27.
Between April 8 and 16, traders reportedly imported nearly 157 million litres of petrol. Regulatory data confirms a daily spike in import volumes. The refinery continues to dispute the legitimacy of import licenses granted to its competitors, but imports are rising nonetheless.
Naira-for-Crude Policy Disruptions
Insiders say the refinery planned a major price reduction around April 10. This plan aligned with a symbolic company date. However, the temporary halt of the naira-for-crude policy disrupted the move. Although authorities have reinstated the policy, the price drop has not followed.
The industry believes the refinery can lead on pricing. Current international trends and local policies offer the chance to reduce pump prices. Delays may erode its relevance and sustain Nigeria’s reliance on imports.