Dangote Refinery Faces N32.5bn Loss Following Petrol Price Reduction
The Dangote oil refinery is set to incur a loss of approximately ₦32.5 billion on its existing 500 million litres stock of Premium Motor Spirit (PMS) following a recent price reduction.
Prior to the price cut, Aliko Dangote, President of the Dangote Group, revealed that the refinery had over 500 million litres of petrol in its storage tanks, which was being sold at ₦890 per litre. At this rate, the total value of the stock amounted to ₦445 billion.
However, on February 27, 2025, the refinery announced a ₦65 reduction, bringing the ex-depot price of petrol down to ₦825 per litre. This adjustment slashed the value of the 500 million litres stock to ₦412.5 billion, resulting in a ₦32.5 billion loss.
This marks the second petrol price reduction by the refinery in February alone. In an earlier move, the company had also lowered the price by ₦60 per litre. Additionally, during the December 2024 yuletide season, Dangote Refinery reduced the price of PMS by ₦70.50, dropping it from ₦970 to ₦899.50 per litre.
Despite the losses, industry experts believe that falling crude oil prices and the recent appreciation of the naira against the US dollar could help the refinery recover.
While Nigerians welcomed the price cut, fuel importers and marketers lamented significant losses, as they were forced to sell their existing stock at a lower price to stay competitive. According to market estimates, importers may lose an average of ₦2.5 billion daily and ₦75 billion monthly due to Dangote’s aggressive price reductions.
Many filling stations across Nigeria have since adjusted their pump prices, with NNPC retail stations in Lagos now selling at ₦860 per litre.
Meanwhile, Nigerians have called on Dangote Group to expand the distribution of its petroleum products across the country, while market projections suggest that PMS prices could drop further to ₦800 per litre, with the landing cost currently standing at ₦783.66 per litre.
