KEY POINTS
- Dangote Refinery’s fresh N49 price cut narrows the gap with import parity and reshapes competition.
- Major marketers say imports could soon become unviable, though smaller retailers warn of supply risks.
- Industry groups call for tariff review as Nigeria still depends on imported fuel for up to 70% of its needs.
Petroleum marketers across Nigeria are rethinking their import plans after the Dangote Petroleum Refinery slashed its ex-depot price for petrol by N49 per litre, a move that could make imported fuel commercially unattractive.
The price adjustment, announced last Friday, brought the refinery’s gantry rate down to N828 per litre from N877, marking a 5.6 per cent reduction. It is the second time in three months that Africa’s largest refinery has lowered its pump price in response to market pressures and an effort to steady domestic supply.
By Monday, the ripple effect was already being felt across the downstream market. Industry operators told The Punch that the new pricing, coupled with the Federal Government’s 15 per cent import tariff on refined products, was tilting the balance sharply in favour of locally refined petrol.
Clement Isong, Executive Secretary of the Major Oil Marketers Association of Nigeria, said Dangote’s latest pricing could render fuel importation uneconomical in the short term.
“It would stop imports now, definitely, since imports are higher than Dangote’s price. That’s the logical thing, isn’t it?” Isong said, noting that the refinery has effectively set a new benchmark for the domestic market.
He explained that while private refiners typically peg prices within a range that reflects import parity, the cost of bringing petrol into Nigeria varies with location, freight charges, and vessel size. “If I bring it into a facility with a sizable draft, I can get lower prices related to freight. But smaller facilities pay premiums,” he said.
Isong also clarified that Dangote’s pricing is guided by a 30-day market average rather than daily fluctuations. “He will keep his eye on that 30-day average. The spot market is too volatile, so you can’t change prices every day,” he added.
Marketers Warn Against Ending Imports Too Soon
Despite the optimism around local refining, smaller operators and retailers remain cautious. The President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, warned that halting imports abruptly could lead to shortages.
“The products that are imported currently complement the 30 to 35 per cent domestic production from facilities like Dangote’s. If imports stop, product unavailability will increase,” Gillis-Harry said.
He confirmed that PETROAN members are already buying from the Dangote Refinery but noted persistent loading delays. “Our members are complaining that they haven’t been able to load what they paid for,” he said.
Gillis-Harry also urged the government to review the 15 per cent import tariff on refined fuel, arguing that a lower duty would ensure sustained market stability. “Imports cannot stop,” he insisted. “We’ll get to a point where things stabilise, but for now, importation still fills a vital gap.”
Data from the Major Energies Marketers Association of Nigeria supports his concern. The group’s latest Energy Bulletin, compiled by S&P Global Commodity Insights, showed that the average import parity price for petrol over the past 30 days stood at N824.10 per litre just four naira lower than Dangote’s N828 gantry rate.
At the ports, the spot landing cost was estimated at N830.80 per litre, underscoring how thin the margin between imports and domestic supply has become. Retail prices across Nigeria currently hover between N850 and N950 per litre, depending on location and retailer mark-ups.
While Dangote’s latest reduction appears to have given consumers slight relief at the pump, the refinery’s pricing strategy is also reshaping the structure of Nigeria’s fuel market. Analysts say it may accelerate the long-anticipated shift from dependence on imported fuel towards a locally driven supply base, provided logistics and tariff bottlenecks are resolved.
For now, the Dangote Refinery’s move is being watched closely by traders, regulators, and consumers alike, a development that may well determine how Nigeria’s downstream sector evolves in the months ahead.
