The Dangote oil refinery is set to lose approximately N32.5 billion from its 500 million litres stock of Premium Motor Spirit (PMS) following a recent price reduction, according to The PUNCH.
The price cut, which lowered the ex-depot price of petrol from N890 to N825 per litre effective from February 27, marks the second price reduction by the refinery in 2025. The first reduction in February was by N60 per litre, and in December 2024, during the holiday season, the refinery reduced prices by N70.50, from N970 to N899.50 per litre, to ease the cost of living for Nigerians.
Prior to the latest price cut, the 500 million litres of petrol in the refinery’s tanks would have generated N445 billion if sold at the old rate of N890 per litre. However, the reduced price of N825 per litre has brought the potential revenue down to N412.5 billion, implying a loss of N32.5 billion.
Experts suggest that the refinery’s losses could be mitigated by the recent decline in crude oil prices and the slight appreciation of the naira against the dollar.
Fuel importers and marketers have expressed frustration over the consistent price reductions by the Dangote refinery, which they claim have made it increasingly difficult to sell imported petrol profitably. BusinessNG estimates that importers may lose an average of N2.5 billion daily and N75 billion monthly due to the price cut.
Several filling stations have adjusted their pump prices below N900 per litre following the reduction, with Nigerian National Petroleum Company Limited (NNPC) retail stations dropping prices to N860 per litre in Lagos.
Meanwhile, marketers have predicted that petrol prices could drop further to around N800 per litre, as the landing cost of PMS currently stands at N783.66 per litre, according to the Major Energies Marketers Association of Nigeria.
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