Petrol prices in Nigeria have decreased to 860 naira per litre due to competitive pricing from the Dangote Refinery. The refinery’s lowering of prices follows significant price hikes after the removal of subsidies. Experts indicate that stable currency and lower crude prices facilitate this decline, showcasing the effects of market competition on pricing structures.
The retail price of petrol in Nigeria has fallen to 860 naira per litre, prompted by competitive pricing from the Dangote Refinery, which has a production capacity of 650,000 barrels per day. This decrease followed two price cuts in February, reducing costs from a five-month peak of 1,030 naira. Shortly after, the Nigerian National Petroleum Corporation Limited (NNPC), a significant petrol retailer, announced its own price reductions, further contributing to the downward trend.
Despite being a leading oil producer, Nigeria has historically depended on petrol imports due to poorly maintained state-owned refineries. Following President Bola Tinubu’s removal of fuel subsidies, petrol prices surged fivefold, climbing from approximately 195 naira per litre in May 2023 to around 1,030 naira by October 2024 in the capital. This drastic increase has exacerbated the ongoing cost-of-living crisis affecting many Nigerians.
The Dangote Refinery, which commenced operations in September 2024, aims to reduce Nigeria’s reliance on imported fuel. In a recent statement, the refinery indicated that the price drop was intended to offer necessary relief to citizens during the Ramadan period. Ademola Adigun, managing director of AHA Strategies Ltd, remarked that this pricing strategy could be aimed at achieving market dominance for the Dangote Refinery.
Aliko Dangote, the owner of the refinery, has rebutted allegations of monopolistic practices despite the significant influence he has in the market. Experts attribute the adjusted fuel prices to a stable Nigerian currency and decreased crude oil prices, which have mitigated the potential for further increases. Clement Isong, president of the Major Energies Marketers Association of Nigeria, noted that the price changes reflect the operations of a deregulated market, highlighting the benefits brought about by competition.
The recent decline in petrol prices in Nigeria reflects the impact of competition driven by the Dangote Refinery’s market entry and pricing strategies. This shift offers relief to consumers amidst a broader economic crisis. Industry experts suggest that the stabilization of the currency and lower crude oil prices played crucial roles in this adjustment. As the market evolves, ongoing competition is likely to benefit consumers further.
Original Source: www.hindustantimes.com
