Business & Economy

Dangote Oil Refinery Faces N32.5bn Loss Following Price Cut

Published

11 hours ago

Mar 13, 2025.

This marks the second price reduction of PMS in February 2025 by Dangote Refinery following a previous decrease of N60 earlier in the month.
Experts suggest that the decrease in global crude prices and the marginal strengthening of the Nigerian naira against the US dollar may help Dangote Refinery recover some of its losses.
Dangote Petroleum Refinery has consistently lowered the prices of petrol and other refined petroleum products to the benefit of Nigerians.

The Dangote oil refinery is projected to incur a substantial loss of N32.5 billion on its stock of 500 million litres of premium motor spirit (PMS), following its recent decision to reduce prices, Eko Hot Blog reports.

Aliko Dangote, President of the Dangote Group, had previously announced that the refinery held over 500 million litres of petrol in its tanks before the price reduction took effect.

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At the previous rate of N890 per litre, the total value of the 500 million litres of petrol would have amounted to N445 billion.

However, the refinery’s statement in February revealed a price cut of N65 per litre, dropping the ex-depot price from N890 to N825.

“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.

Dangote Oil Refinery Faces N32.5bn Loss Following Price Cut

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.

The company’s move to lower its ex-depot price from N890 to N825 per litre has not only incurred a substantial N32.5 billion loss on its 500 million litres of premium motor spirit (PMS) stock but has also ignited fierce competition among oil marketers.

As Dangote refinery continues to import crude and gradually increases its production capacity, experts suggest that the decrease in global crude prices and the marginal strengthening of the Nigerian naira against the US dollar may help the company recover some of its losses.

While consumers have welcomed the price cuts, fuel importers and marketers have expressed concern over their own losses, as they are compelled to sell below the landing cost in order to remain competitive in the market.