Dangote Petroleum Refinery has reduced the ex-gantry price of Premium Motor Spirit (PMS), popularly known as petrol, by N50 per litre, a move that appears to validate concerns raised by THE WHISTLER over the pace at which lower global crude oil prices are being reflected in domestic fuel costs.
In a notice issued to customers on Thursday, the refinery announced that its ex-depot petrol price had been adjusted downward from N1,175 per litre to N1,125 per litre. The refinery also reduced its coastal supply price from N1,495,215 per metric tonne to N1,428,165 per metric tonne.
The latest reduction comes barely 24 hours after THE WHISTLER published an analysis titled “US-Iran Ceasefire: Crude Slump Puts Dangote’s N1,200 Petrol Under Spotlight,” https://thewhistler.ng/us-iran-ceasefire-crude-slump-puts-nigerias-n1200-litre-petrol-price-under-scrutiny/ which questioned why petrol prices remained elevated despite a sharp decline in international crude oil prices following the ceasefire agreement between the United States and Iran.
At the time, THE WHISTLER reported that Brent crude had fallen from a wartime peak of about $126 per barrel to around $70 per barrel, effectively erasing much of the geopolitical risk premium that had driven energy prices higher during the conflict.
The refinery attributed the latest reduction to easing tensions in the Middle East and the resulting decline in global energy prices.
“The adjustment reflects current realities in the international oil market following the de-escalation of geopolitical tensions in the Middle East,” the company said.
The latest cut follows another reduction announced less than two weeks ago when Dangote lowered its ex-gantry price by N75 per litre from N1,250 to N1,175. That adjustment was also linked to improved market conditions arising from the ceasefire and stabilisation of global oil supply chains.
Earlier in the year, however, the refinery had increased petrol prices several times as concerns over supply disruptions in the Middle East pushed crude oil prices sharply higher.
The conflict, which began in February, raised fears that shipments through the Strait of Hormuz — a strategic route for nearly 20 per cent of global crude oil trade — could be disrupted. The uncertainty drove Brent crude above $120 per barrel, peaking at about $126 in April.
The rise in crude prices translated into higher fuel costs worldwide, including in Nigeria, where petrol prices surged from between N830 and N900 per litre before the conflict to around N1,360 per litre during the height of the crisis.
In its report, THE WHISTLER noted that while crude oil prices had largely reversed their gains after the ceasefire, domestic petrol prices had been slower to adjust downward.
Using historical price transmission patterns, the analysis estimated that with crude prices declining by more than 40 per cent, petrol should realistically be selling between N900 and N1,000 per litre, even after accounting for exchange rates, logistics costs, dealer margins and other operational expenses.
The refinery’s latest adjustment appears to be a response to those changing market realities.
Industry stakeholders say the reduction is likely to trigger a fresh round of adjustments across depots and retail outlets as marketers align with the new pricing template.
The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chief Chinedu Ukadike, had earlier stated that lower ex-depot prices were already easing pressure on marketers and improving their ability to stock products.
According to him, declining supply costs have reduced the amount of capital required to purchase petroleum products, enabling marketers to increase inventory and improve product availability nationwide.
He noted that operators who previously struggled to finance a single truckload of petrol could now afford significantly larger volumes due to the lower cost of supply.
Analysts also believe that growing competition within the deregulated downstream petroleum sector is beginning to exert downward pressure on prices.
Unlike in the era of fuel subsidy, where government largely determined pump prices, deregulation has shifted pricing decisions to market forces, making crude oil prices, exchange rates and competition among suppliers critical determinants of what consumers pay.
The latest development comes as global oil prices continue to retreat following the peace agreement signed by the United States and Iran in Switzerland. The agreement established a 60-day negotiation framework aimed at preventing a resurgence of hostilities and restoring stability to international energy markets.
Brent crude has since fallen to about $72.97 per barrel, its lowest level since before the conflict escalated.
The decline has prompted renewed calls for fuel prices to reflect prevailing market conditions more quickly.
Interestingly, the debate is not limited to Nigeria. In the United States, President Donald Trump recently directed the Department of Justice to investigate allegations that major oil companies were failing to lower fuel prices in line with falling crude oil costs.
Industry experts often describe the phenomenon as the “rockets and feathers” effect — where fuel prices rise rapidly when crude oil increases but fall much more slowly when oil prices decline.
For Nigerian consumers grappling with high transportation and living costs, the latest N50 reduction may offer some relief. However, many analysts insist that further reductions are possible if global crude prices remain below $75 per barrel and exchange-rate stability is sustained.
With Dangote Refinery accounting for a significant share of domestic fuel supply and competition among marketers intensifying, attention will now shift to whether retail pump prices will follow the refinery’s latest move and bring meaningful relief to households and businesses across the country.
