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The Dangote oil refinery is expected to lose approximately N32.5 billion from its 500 million-litre stock of premium motor spirit due to the recent price cut, according to reports.
A few days before the refinery announced the price slash, the President of the Dangote Group, Alhaji Aliko Dangote, revealed that the refinery had over 500 million litres of gasoline in its tanks. At the time, the refinery was selling a litre of petrol at N890.
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Our correspondent calculates that the 500 million litres of gasoline would amount to N445 billion if sold at the old rate of N890 per litre. However, following the price reduction, the refinery will now sell the petrol at N825 per litre.
In a statement, the Dangote refinery announced the reduction in the ex-depot price of petrol by N65, effective from February 27. This marks the second price reduction in the new year.
“It is important to note that Dangote Petroleum Refinery has consistently lowered the prices of petrol and other refined petroleum products to the benefit of Nigerians. This marks the second price reduction of PMS in February 2025, following a previous decrease of N60 earlier in the month.
“Additionally, in December 2024, during the Yuletide period, the refinery reduced the price of PMS by N70.50, from N970 to N899.50 per litre, as part of its commitment to easing the cost of living and providing relief to Nigerians during the holiday season. This reduction has positively impacted the overall cost of living, benefiting various sectors of the economy, and has also ensured that Nigerians did not experience the perennial fuel scarcity and price hikes typically associated with the yuletide season,” the company stated.
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The company noted that this reduction has positively impacted the overall cost of living, benefiting various sectors of the economy, and has also ensured that Nigerians did not experience the perennial fuel scarcity and price hikes typically associated with the yuletide season.
Selling the 500 million litres of PMS at N825 per litre following the reduction will lower the company’s expected income from the stock to N412.5 billion, likely reducing its margin. This means the company must have sold the 500 million litres at N32.5 billion below its original value of N445 billion.
However, experts suggest that the crash in crude prices and the marginal strength the naira gained lately against the dollar would help the refinery recover its losses.
Fuel importers and marketers have lamented the consistent price reduction by the Dangote refinery, stating that they are losing billions of naira. As Nigerians rejoice over the price slash, fuel importers count their losses as they are compelled to sell below the landing cost.
According to some importers, the Dangote refinery is gradually making importation less attractive with the manner in which it has dropped the prices of petrol and diesel lately. They claim to have been managing to sell the imported products with little or no margin due to the need to compete well in the market.
Reports estimate that importers may lose an average of N2.5 billion daily and N75 billion monthly following the latest PMS price reduction announced by the Dangote refinery.
Marketers with old stocks also lamented that they had incurred heavy losses with the latest price reduction. But they were not the only ones affected by the development; even the refinery will have to sacrifice billions of naira.
Correspondents confirmed that many filling stations had lowered their pump prices below N900 per litre following the reduction by the Dangote refinery. The Nigerian National Petroleum Company Limited retail stations dropped prices to N860 per litre in Lagos.
Meanwhile, Nigerians have appealed to Dangote to increase the number of filling stations selling its petroleum products across Nigeria.
However, marketers have projected that petrol prices may drop to N800 as the landing cost now stands at N783.66 per liter, according to the Major Energies Marketers Association of Nigeria
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