The price cuts at Dangote Refinery have sparked much hope for Nigerians who have long struggled with high fuel prices. On February 1, 2025, the refinery announced a notable reduction in the ex-depot price of petrol from N950 to N890 per litre as reported by Prime Business Africa. This decision was attributed to the drop in global crude oil prices, offering an optimistic outlook for the energy market. The price reduction at the refinery is seen as a glimmer of hope for consumers, but the question remains: Will the price cuts reflect at petrol stations across the country anytime soon?
While Nigerians are eagerly waiting for the promised reduction in fuel prices, experts and retail fuel outlet owners warn that the reduction may not be immediately felt at filling stations. According to the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), a variety of challenges will likely delay the reduction at the pump. Many filling stations still have stock bought at the previous, higher prices. This complicates the process of implementing a price drop at retail outlets in the short term.
Join our WhatsApp ChannelBilly Gillis-Harry, the National President of PETROAN, expressed optimism about the eventual change but explained that the immediate impact of the price reduction on retail prices would be limited. “Price changes are not usually instantly applicable, but ultimately, it will apply. You can’t see it immediately, because we have already bought products,” Gillis-Harry said during an interview on Arise News. “We have already purchased different kinds of products in our retail outlets at the price it was prior to the changes made this evening.” This makes it clear that while the price reduction is real, its effect on retail prices will take time to materialize.
The Impact of Dangote Refinery’s Price Reduction on Fuel Prices
Dangote Refinery’s decision to reduce its petrol prices has garnered positive reactions from Nigerians, especially those who rely on fuel for their daily activities. With the price reduction, the ex-depot price now stands at N890 per litre, a notable drop from the previous price of N950. The refinery has explained that this price cut was triggered by falling global crude oil prices, which have caused a drop in the cost of fuel production.
However, while the price reduction is a welcome move, it does not automatically mean that Nigerians will see cheaper petrol at filling stations. As Gillis-Harry mentioned, many stations have petrol stock that was purchased at the higher prices before the reduction. Retail outlets are unlikely to sell their existing stock at a loss, which further complicates the immediate implementation of the price reduction.
At the same time, the reduction by Dangote Refinery is seen as a sign of hope for the country’s downstream petroleum sector. According to Anthony Chiejina, the Group Chief Branding and Communications Officer of Dangote Group, the refinery is committed to offering transparent and fair pricing for petroleum products. “Our commitment is to ensure fairness and transparency in the pricing of petroleum products for Nigerians,” Chiejina said. “This reduction will help ease petrol costs across the country and may reduce the prices of goods and services as well.”
READ ALSO: Dangote Refinery Reduces Petrol Price To N890/Litre
The Delayed Effect of Price Reductions at Retail Stations
Despite the announcement of the price reduction, the reality at petrol stations may not align with the immediate expectations of many Nigerians. The delay in price reductions at retail outlets is expected to persist for a while. Filling stations must sell their current stock before they can adjust to the new prices. This means that the price reduction will only be reflected in retail outlets once stations deplete their existing stock, which was bought at a higher price.
Some Nigerians are already expressing frustration over the delay in price cuts, with many expecting immediate relief. On X (formerly Twitter), users voiced their concerns, questioning why the reduction wasn’t being passed on to consumers right away. @peteh war wrote, “Dangote Refinery reduced prices, but I’m still paying high at the pump. Why is this taking so long?” Another user added, “It’s not enough for the refinery to reduce prices; the government and the filling stations should follow suit.”
Will Nigerians Benefit from Dangote Refinery’s Price Reduction?
In the face of these delays, many Nigerians are skeptical about whether they will benefit from the price reduction. As one user on X, @Emeka_Okafor put it, “The refinery is cutting prices, but how long will it take for that to reflect at the station? I’m not getting my hopes up.” While the refinery has made the reduction official, consumers are left wondering whether the anticipated benefits will trickle down to them.
Experts suggest that the delay in price reductions is common when there is a shift in fuel pricing, particularly in a market where there is stock purchased at higher prices. “It’s a process,” said Dr. Gabriel Oke, an energy economist. “Filling stations have to sell their old stock before they can start buying at the new price. This creates a lag, which is why it might take a few weeks before the new price is visible at the pump.”
The Role of PETROAN and Retailers in Ensuring Fair Pricing
PETROAN has been advocating for fair pricing, urging members to reflect the new price in their retail outlets once they begin to purchase at the reduced ex-depot price. Gillis-Harry emphasized this point during his interview, saying, “Anyone who starts buying at the new price from Sunday should endeavor to reflect that price in their retail outlets.”
Retailers have been called upon to collaborate with Dangote Refinery and other stakeholders to ensure that consumers receive the benefits of the price cuts as soon as possible. However, Gillis-Harry also warned that the transition might take some time, stressing that “the price reduction is a gradual process and cannot be implemented overnight.”
What Lies Ahead for Nigeria’s Fuel Market?
As the Dangote Refinery’s price reduction takes effect, Nigerians are left waiting to see how long it will take before they feel the impact at the pump. While the reduction is certainly a step in the right direction, several factors, including stock levels at filling stations, will play a significant role in determining how quickly retail prices align with the new ex-depot price.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.