Osamagbe Imadiyi
The recent price cut will cost the Dangote oil refinery up to N32.5 billion from its 500 million-liter supply of premium motor spirit. Alhaji Aliko Dangote, President of the Dangote Group, told reporters that the refinery had more than 500 million liters of gasoline in its tanks a few days prior to the refinery’s announcement of a price cut. When this discovery was made, the refinery was charging N890 for a liter of gasoline. If the 500 million liters of gasoline are sold at the previous price of N890 per liter, it is estimated that the total revenue will be N445 billion. The Dangote refinery said in a statement last month that the ex-depot price of gasoline would drop by N65, from N890 to N825 per litre, starting on February 27. This is the second price cut of the year.
“To the benefit of Nigerians, Dangote Petroleum Refinery has continuously reduced the price of gasoline and other refined petroleum products. After an N60 price cut earlier in the month, this is PMS’s second price reduction in February 2025.Furthermore, as part of its efforts to lower living expenses and help Nigerians over the holidays, the refinery lowered the price of PMS by N70.50 per litre during the Yuletide season in December 2024, from N970 to N899.50. In addition to helping many economic sectors, this cut has improved living expenses overall and prevented Nigerians from having to deal with the yearly shortage of fuel and price increases that are usually connected to the holiday season”, the company said.
It was estimated that the company’s expected income from the stock would drop to N412.5 billion after the 500 million litres of PMS were sold at N825 per litre after the reduction, likely eliminating its margin. This indicates that the 500 million liters must have been sold for N32.5 billion less than their initial N445 billion value. Fuel importers were forced to sell below the landing cost, so they counted their losses as Nigerians celebrated the price cut. The Dangote refinery recently announced a reduction in PMS prices, which is expected to cost importers an average of N2.5 billion per day and N75 billion per month.
