A report by S&P Global suggests that the pricing strategy of the Dangote Petroleum Refinery, with its gradual price reductions not fully mirroring global price drops, has inadvertently created an incentive for the continued importation of refined petroleum products into Nigeria
According to a recent report by S&P Global, the pricing mechanism adopted by the Dangote Petroleum Refinery for its refined petroleum products has inadvertently emerged as a factor incentivizing the continued importation of these products into Nigeria.
Also read: Dangote Refinery:A PLEA FOR CAUTION
The report highlights that while the global prices of petroleum products have seen a significant decline, the corresponding price reductions at the Dangote refinery’s gantry have not been substantial enough to discourage imports.
The Dangote refinery has implemented several reductions in the price of petrol, leading to a competitive pricing environment within the downstream sector.
From an initial price of around N1,100 per litre in September, the refinery successfully lowered the price to N860 in March.
However, this price subsequently saw an increase following the suspension of the naira-for-crude oil exchange deal.
Despite these price adjustments, S&P Global’s analysis indicates that the 650,000 barrels per day capacity refinery has not significantly reduced its gantry prices for truck volumes, thereby making fuel imports a more attractive option for marketers.
“Incentives to ship products to West Africa have also come from the pricing at Nigeria’s Dangote refinery. While flat prices have been driven down massively amid falling crude prices, Dangote has not lowered gantry prices for truck volumes significantly,” the S&P Global report stated.
The report further illustrated this point by comparing the price movements of Eurobob M1 swap, a European gasoline benchmark, with Dangote’s gantry prices.
“Between April 1 and April 9, the Eurobob M1 swap fell from $734.25 per metric tonne to $603/MT, a 17.9 per cent fall, before recovering somewhat.
But over the same period, Dangote’s truck price at the gantry dropped just 1.7 per cent from N880/litre to N865/litre, according to reporting from the MEMAN retail organisation.”
S&P Global concluded that this pricing disparity has “encouraged a flood of products to West Africa, where high domestic prices have led marketers to import from international traders in greater volumes.”
On Wednesday, the Dangote refinery further reduced its petrol gantry price to N835 per litre, advising its partner retail outlets to sell at N890 per litre in Lagos. This price adjustment was also reflected in other regions of the country.
Our correspondent’s observations at filling stations in Ogun and Lagos states confirmed that other retailers have also lowered their petrol prices, indicating a growing competitive landscape.
Notably, an independent retailer, SGR, with multiple stations in Mowe and Sagamu, was selling petrol at N878 per litre, below Dangote’s recommended retail price.
A source familiar with operations at the Dangote refinery suggested that the initial plan by the President of the Dangote Group, Aliko Dangote, to announce a significant price drop on his birthday (April 10th) was hampered by the disruption of the naira-for-crude deal.
However, with the reinstatement of this policy and the current decline in global crude oil prices, the source anticipates a more substantial price reduction from the Dangote refinery in the near future, aiming to make petrol more affordable for the general populace and counter the incentives for importation.
The source also alleged that petrol importers were resisting the naira-for-crude transaction to protect their import business.
Meanwhile, S&P Global also highlighted an unseasonal increase in European gasoline exports to West Africa, driven by threats of further tariffs from the United States and favorable arbitrage opportunities.
Ship-tracking data indicates a projected delivery of 4 million metric tonnes of petrol into West Africa in the 30-day period leading up to April 27, a two-year high.
Traders imported 156.897 million litres of petrol between April 8 and 16. On Tuesday, the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, stated that daily petrol imports had significantly decreased from 44.6 million litres in August 2024 to 14.7 million litres in April 2025. It is worth noting that the Dangote refinery is currently engaged in a legal challenge against the NMDPRA’s decision to issue import licenses to marketers.e]
