Dangote reveals the real reason why fuel prices have reduced in Nigeria

The Nigerian billionaire and owner of the $20 billion Dangote Refinery, Aliko Dangote, recently explained the reasons behind the significant drop in fuel prices in Nigeria after a year of consistent price hikes.

The president of the Dangote Group revealed that the reduction in the price of Premium Motor Spirit (petrol) during the festive season was driven by market forces rather than deliberate efforts by marketers to ease the economic burdens associated with the season.

In an interview with Arise TV, Dangote emphasized the need to safeguard the interests of his refinery while ensuring market responsiveness.

“The price reduction is a response to the market, let me just put it that way. This is a refinery where we invested over $20 billion, and I think we have to try and protect our interests and also our investments,” he explained.

On December 19, the Dangote Refinery announced a reduction in the ex-depot price of petrol to N899.50 per liter.

This move spurred fierce pricing competition in the downstream sector, prompting the Nigerian National Petroleum Company Limited (NNPCL) to lower its ex-depot price to N899 per liter.

To the delight of Nigerians, the Dangote Refinery also disclosed plans to collaborate with MRS fuel stations to offer fuel at retail locations nationwide for N935 per liter.

During the interview, Dangote highlighted the impact of petroleum imports on Nigeria’s foreign exchange reserves, as reported in Punch newspaper.

“Forty percent of our demand on foreign exchange comes from those dealing in petroleum products. The more we allow imports, the more we deplete our foreign exchange reserves. Most of the letters of credit opened for petroleum imports take resources out of the country,” he stated.

As Nigerians prepared for the Yuletide season, characterized by increased interstate travel, the Dangote Refinery announced the fuel price reduction, much to the surprise and relief of commuters.

“To alleviate transport costs during this holiday season, Dangote Refinery is offering a holiday discount on PMS. From today [December 27, 2024], our petrol will be available at N899.50 per liter at our truck loading gantry or SPM,” announced Anthony Chiejina, Group Chief Branding and Communications Officer for Dangote Group.

He added, “Furthermore, for every liter purchased on a cash basis, consumers will have the opportunity to buy another liter on credit, backed by a bank guarantee from Access Bank, First Bank, or Zenith Bank.”

The Dangote Refinery, the largest single-train refinery in the world, boasts a production capacity of 650,000 barrels per day. It is designed to meet Nigeria’s refined petroleum product needs and supply surplus for export.

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