A Major Fuel Price Drop Ahead of the Festive Season

Nigerians are getting rare relief at fuel stations following a significant reduction in petrol prices by the Dangote Refinery. The refinery has lowered its ex-depot price to ₦699 per litre, down sharply from the previous ₦828, marking one of the most consequential fuel price changes in 2025.

The adjustment, which took effect on December 11, represents the refinery’s 20th price review this year. With fuel costs squeezing households, transport operators, and businesses nationwide, the more than 15 percent reduction arrives at a critical time, just as end-of-year travel and spending increase.

Pressure Mounts on Fuel Importers and Depot Owners

While consumers welcome the price slash, the development has intensified challenges for traditional fuel importers and private depot operators. Since Dangote Refinery began large-scale production, many import-dependent players have struggled to remain competitive.

In response to the new pricing, several depot owners quickly revised their rates. TechnoOil reduced its price by ₦15, Sigmund Depot made a ₦4 adjustment, while others including A.A. Rano, NIPCO, and Aiteo have started aligning their prices.

According to a Lagos-based fuel distributor, the pace of Dangote’s reductions is rapidly shrinking profit margins. “We can’t match these prices without operating at a loss. Dangote’s scale and refining efficiency give it a massive edge,” the distributor said.

Fuel Imports Continue Despite Local Refining Capacity

Despite the refinery’s expanding output, Nigeria’s fuel market remains complex. Data shows the country spent about $1.26 billion on petrol imports in the first quarter of 2025 alone, with marketers importing roughly 2.28 billion litres between January and March.

These figures highlight the ongoing transition in the downstream sector, where legacy importers attempt to stay relevant as domestic refining increasingly reshapes supply and pricing dynamics.

Policy Signals and Regional Price Gaps

The latest price cut followed a meeting between Aliko Dangote and President Bola Tinubu on December 6. During the discussion, Dangote reaffirmed his commitment to keeping local fuel prices competitive, particularly as petrol prices in neighbouring countries reportedly range between ₦1,500 and ₦1,600 per litre.

Dangote also noted that fuel smuggling has declined significantly, attributing the drop to pricing that removes profit incentives for illegal cross-border trade.

A Changing Downstream Market Structure

Industry analysts say Nigeria’s downstream sector is undergoing a structural shift. Rather than collective price negotiations among marketers, operators are now engaging directly with Dangote Refinery. This one-on-one model accelerates price adjustments and intensifies competition nationwide.

NNPC Ltd has also reacted to the changing market, adjusting its pump prices twice in recent weeks. In Abuja, petrol at NNPC stations currently sells between ₦915 and ₦937 per litre.

What the Price Cut Means for Nigerians

The most immediate beneficiaries of the price reduction are everyday Nigerians, particularly commuters who rely on public transportation. Dangote Refinery’s management says the objective is to lower transport costs and reduce financial pressure during the busy holiday period.

If the downward trend continues, analysts believe some filling stations could soon retail petrol at around ₦600 per litre—a level not seen in years.

A Signal of a New Era in Fuel Supply

With a refining capacity of 650,000 barrels per day and an investment value of approximately $19 billion, the Dangote Refinery has the ability to meet—and even exceed—Nigeria’s domestic fuel demand.

Its aggressive pricing strategy may be laying the foundation for a more stable, transparent, and competitive fuel market, potentially ending decades-long cycles of scarcity that have plagued the country since the 1970s.

For now, the ₦699 price announcement represents more than a routine adjustment. It offers rare relief in a challenging year and signals that Nigeria’s fuel market may be entering a transformative phase.