The Dangote oil refinery is set to lose approximately N32.5bn from its 500 million litres stock of Premium Motor Spirit (PMS) due to a recent price cut, News Bulletin reports.
Before the refinery announced the price reduction, Alhaji Aliko Dangote, President of the Dangote Group, had disclosed that the refinery had over 500 million litres of petrol in its storage tanks. At that time, the refinery was selling a litre of petrol at N890.
Based on this price, the 500 million litres of petrol would have generated N445bn in revenue. However, following the N65 per litre price reduction, bringing the ex-depot price down to N825 per litre, the total revenue from the stock will drop to N412.5bn, resulting in a potential N32.5bn loss for the company.
This marks the second price reduction in 2025, following an earlier N60 per litre cut in February. In December 2024, during the festive period, the refinery also reduced the price of petrol by N70.50 per litre, from N970 to N899.50, to ease the financial burden on Nigerians.
Despite the losses, industry experts believe the fall in crude oil prices and the recent strengthening of the naira against the dollar may help the refinery offset some of its financial setbacks.
Meanwhile, fuel importers and marketers have expressed concerns over Dangote’s continued price reductions, claiming they are losing billions of naira as importation becomes less viable. Many importers say they are struggling to sell their products at competitive rates, often with little to no profit margins.
With the latest price cut, importers could face average daily losses of N2.5bn, amounting to N75bn monthly, according to The PUNCH’s estimates. Additionally, marketers with old stock have suffered significant losses as they are forced to lower prices to remain competitive.
Following the price cut, many filling stations reduced their pump prices to below N900 per litre, with NNPC retail outlets in Lagos adjusting their prices to N860 per litre.
Amid these developments, Nigerians have called on Dangote to expand the distribution of its petroleum products nationwide. Meanwhile, projections from the Major Energies Marketers Association of Nigeria suggest that petrol prices could soon drop to N800 per litre, as the landing cost now stands at N783.66 per litre.
