The Dangote Petroleum Refinery has reduced the ex-gantry price of Premium Motor Spirit (petrol) in Nigeria to N1,200 per litre ($0.87), reversing a price hike implemented just a day earlier, according to a confidential source at the refinery.
This adjustment represents a N75 cut from the previous price of roughly N1,275 per litre ($0.92), which was introduced in response to rising international oil costs and supply concerns.
The earlier increase had pushed petrol prices up by over 5%, while diesel costs rose by N200 ($0.14) to N1,950 per litre ($1.41), an official told the Punch newspaper, highlighting the rapid swings in fuel pricing within a short timeframe.
These fluctuations underscore the vulnerability of Nigeria’s energy sector to global market disruptions, despite the country hosting the world’s largest single-train refinery and being the continent’s top crude oil producer.
An official, speaking anonymously, noted that the price adjustment aligns with global market developments, particularly tensions in the Middle East, which have a direct impact on crude oil and refined product pricing.
The recent drop in crude prices is mainly linked to easing geopolitical tensions involving Iran. Brent crude, the international oil benchmark, declined after former U.S. President Donald Trump announced a two-week suspension of planned military action against Iran.
This pause is aimed at ensuring safe navigation through the strategic Strait of Hormuz, a critical route for global oil shipments, reducing earlier fears of supply disruptions that had previously pushed prices higher.
The refinery also cited an increase in crude allocations from the Nigerian National Petroleum Corporation during March, following a period of significant supply shortages.
In March, the refinery received ten crude cargoes from the NNPC, according to owner Aliko Dangote.
Refinery CEO David Bird previously highlighted inefficiencies in the naira-for-crude arrangement as a major obstacle to the refinery’s financial performance, noting that the facility ideally requires 13 to 15 cargoes monthly to meet domestic fuel demand.
“Under that agreement, we should be receiving 13 to 15 cargoes a month to satisfy national fuel needs. Currently, we are only getting five, which is below the agreed volume,” Bird explained at the time.
Although the increased crude supply improved operational capacity, it did not prevent the earlier fuel price hike. However, the recent ceasefire in the Middle East quickly prompted a reduction in petrol costs in the West African nation.