Dangote refinery cuts petrol price again to support local supply

DDM News

The Dangote Refinery has announced a fresh reduction in its ex-depot petrol price

According to Diaspora digital media (DDM), the new price has been set at N865 per litre, down from N880 per litre.

This reduction was communicated to petroleum marketers and customers on Thursday morning.

It comes just a day after the refinery last adjusted its pricing.

Industry sources had earlier indicated that a price drop was likely by the end of the week.

They had hinted that the 650,000 barrels-per-day facility would soon respond to market pressure and adjust accordingly.

This latest cut is expected to contribute to a gradual reduction in retail fuel prices nationwide.

Chinedu Ukadike, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), confirmed the development.

He reassured consumers that the price drop would soon be reflected at fuel stations.

Ukadike emphasized that the refinery’s action aligns with ongoing government efforts to stabilize the energy sector.

He particularly referenced the Federal Executive Council’s directive to implement the naira-for-crude agreement with local refineries.

This policy initiative had faced initial delays but was revived this week by the government.

The Federal Executive Council (FEC) has now mandated full implementation of the naira-for-crude policy.

The policy is designed to promote crude oil sales to local refiners in exchange for refined products, paid for in naira.

This move is intended to reduce Nigeria’s reliance on foreign exchange in petroleum transactions.

It also aims to support the local refining industry and ensure a steady supply of fuel.

In a statement released on its verified X (formerly Twitter) handle, the Ministry of Finance offered more details.

The post, titled “Update on the Crude and Refined Product Sales in Naira Initiative,” followed a meeting with Dangote Refinery representatives.

Finance Minister Wale Edun chaired the meeting to review the initiative’s progress and challenges.

The ministry reiterated the government’s commitment to the naira-based transaction model.

Officials described the initiative as critical to Nigeria’s energy security and economic sustainability.

They believe that backing local refiners with supportive policy frameworks will improve the overall petroleum value chain.

This development is the latest in a string of changes since the refinery’s commissioning.

The Dangote Refinery was inaugurated in May 2023 after years of construction and investment.

It is located in the Lekki Free Trade Zone in Lagos State and cost over $19 billion to build.

With a refining capacity of 650,000 barrels per day, it is the largest single-train refinery in the world.

The facility was designed to meet all of Nigeria’s domestic refined product needs and export surplus across Africa.

Before its launch, Nigeria heavily depended on imported refined fuel despite being a major crude oil producer.

This dependence created recurring fuel shortages and strained the country’s foreign reserves.

The introduction of local refining capacity was seen as a long-awaited solution to Nigeria’s petroleum crisis.

The naira-for-crude initiative was first proposed as a way to leverage local currency in oil trade.

It aims to reduce pressure on the naira, support macroeconomic stability, and protect local businesses from volatile forex markets.

With the Dangote Refinery now active, these goals appear more attainable.

Stakeholders believe the collaboration between private sector giants like Dangote and federal policymakers is crucial.

They argue that strategic partnerships and consistent regulation are key to transforming Nigeria’s energy future.

The recent price cut shows how responsive the refinery is to both market forces and government direction.

This synergy is expected to continue delivering benefits to ordinary Nigerians.

As local refining becomes more efficient, more price reductions are expected in the coming months.

This will likely ease transport costs, lower inflationary pressures, and improve the daily lives of citizens.

The ongoing implementation of the naira-for-crude model also promises long-term benefits for Nigeria’s economy.

The government has pledged to continue monitoring and supporting the initiative’s rollout.

With such developments, the outlook for local fuel supply and pricing remains optimistic.

The Dangote Refinery’s actions serve as a milestone in Nigeria’s quest for energy independence.

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