Dangote refinery’s pricing strategy under fire as fuel Imports rise

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The Dangote Petroleum Refinery’s pricing strategy for refined petroleum products has been identified as a key factor encouraging imports into Nigeria. According to a report by S&P Global, the refinery’s price reduction is not significant compared to the global decline in prices.

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The report notes that the refinery’s gantry prices for truck volumes have not been lowered substantially, despite a significant drop in global prices. For instance, between April 1 and April 9, the Eurobob M1 swap fell by 17.9%, while Dangote’s truck price at the gantry dropped by only 1.7%.

This pricing disparity has led to a surge in imports, with S&P Global stating that “incentives to ship products to West Africa have also come from the pricing at Nigeria’s Dangote refinery.” The report adds that the refinery’s pricing strategy has encouraged marketers to import fuel from international traders.

In a recent development, the Dangote refinery reduced the gantry price of petrol to N835, with its partners selling at N890 per litre in Lagos. The company’s statement read, “High-quality Dangote petrol will now be available at the following prices across all our partner retail outlets…”

A source close to the refinery revealed that Aliko Dangote had planned to announce a significant price drop on his birthday but was unable to do so due to the suspension of the naira-for-crude deal. The source said, “Alhaji was planning a massive price cut on his birthday, April 10, but that could not happen because of the suspension of the naira-for-crude policy.”

The source added that with the reinstatement of the naira-for-crude deal and the current decline in crude prices, Dangote would have the opportunity to reduce prices further and make petrol more affordable

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