Dangote Petroleum Refinery and Petrochemicals has revised its ex-depot price for petrol to N867 per litre. This price adjustment follows a meeting between the refinery and the Minister of Finance, Wale Edun. Consequently, filling stations with special agreements with Dangote, such as MRS Oil & Gas, Ardova Plc, and Heyden, will likely lower their pump prices to around N910 from N925, reflecting the new ex-depot cost. This move is seen as part of the government’s ongoing strategy to stabilize fuel prices and reduce dependence on the US dollar for petroleum transactions.
Ex-Depot Price Cut and Naira for Crude Initiative
The price reduction stems from a government-backed initiative to sell crude to local refineries in naira instead of US dollars, aiming to stabilize the local currency and reduce pressure on the US dollar. Since July 2024, the Nigerian government, through the Federal Executive Council (FEC), mandated that crude sales to Dangote and other refineries be conducted in naira. This policy aims to promote local refining and prevent price instability due to exchange rate fluctuations.
The Impact of Naira-Denominated Crude Sales on Fuel Prices
The Dangote Refinery had initially halted the sale of petrol in naira, citing mismatches between crude oil purchase obligations, which are dollar-denominated, and product sales in naira. However, with the new policy under President Bola Tinubu’s administration, the refinery resumed sales in naira. Experts believe that this policy shift will help stabilize the price of petroleum products, particularly for Nigerians who often face unpredictable price hikes due to reliance on foreign exchange. It is expected that this will reduce the pressure from dollar-denominated imports, ultimately benefiting the local economy.
N867 Per Litre – What’s Next for Nigeria’s Fuel Price Stability?
The adjustment to N867 per litre by Dangote Refinery is a welcome development for many Nigerians who have endured high fuel prices in the past. With the government’s continued focus on the naira-for-crude initiative, this could lead to more consistent pricing at the pump and further stability in the petroleum sector. However, while the current reduction offers some relief, the long-term impact will depend on how successfully the naira-for-crude policy is implemented and whether it can sustain fuel price stability moving forward.
