Petrol Price Skyrocket After Dangote Refinery’s Hike.
The retail price of Premium Motor Spirit (PMS), commonly known as petrol, has surged to unprecedented levels across Nigeria, with prices now ranging between ₦1,030 and ₦1,150 per litre. This sharp increase follows a recent price hike by Dangote Refinery and rising ex-depot costs, significantly impacting motorists and businesses nationwide.
Price Hike by Dangote Refinery
On Friday, reports emerged that the Dangote Refinery, valued at $20 billion, raised its ex-depot price from N899 per litre to ₦955 per litre, a 6.17% increase. The adjustment came after a brief holiday discount in December, during which the ex-depot price had been temporarily reduced to N899.
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In a communication to its customers, Dangote Refinery outlined the new pricing structure:
- ₦955 per litre for marketers purchasing between 2 million and 4.99 million litres.
- ₦950 per litre for those buying 5 million litres or more.
This adjustment has triggered a chain reaction, with filling stations nationwide revising their petrol prices upward.
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Impact on Retail Prices
The hike in ex-depot prices has directly affected retail petrol prices across the country. According to Chinedu Ukadike, spokesperson for the Independent Petroleum Marketers Association of Nigeria (IPMAN), prices at filling stations now vary depending on location.
- In areas closer to depots, petrol is selling for around ₦1,100 per litre.
- In remote locations, prices have risen to over ₦1,150 per litre, factoring in logistics costs of approximately N50 per litre.
“Commuters will likely pay over ₦1,150 per litre at faraway locations,” Ukadike noted, emphasizing that these changes are tied to fluctuations in global crude oil prices.
Filling Stations Adjust Prices
In Abuja, some filling stations have already increased their prices by at least N50 per litre. Stations that sold petrol at ₦980 per litre on Friday morning raised their prices to between ₦1,040 and ₦1,155 per litre by the evening.
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Meanwhile, Nigerian National Petroleum Company Limited (NNPC) retail outlets continue to sell at ₦965 per litre, offering temporary relief to consumers in areas where NNPC stations are accessible.
Industry Reactions
Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN)
Billy Gillis-Harry, President of PETROAN, stated that while it is too early to predict the new retail price trends fully, higher prices are inevitable.
“Right now, we still have an obligation with the MRS to sell at ₦935 per litre. However, if depot prices increase due to Dangote’s adjustment, the conversation will shift. Once we compute logistics costs, we can determine a humane profit margin,” he explained.
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Depot Owners’ Adjustments
Depot owners also played a role in the rising prices, having increased their petrol prices earlier in the week. This further compounded the cost for independent marketers and filling stations.
Crude Oil Prices Influence
Global crude oil prices, which recently rose to $81 per barrel, have significantly influenced the cost of refined petroleum products in Nigeria. As crude prices rise, refineries and suppliers adjust their costs, trickling down to consumers.
A Historical Perspective
This is not the first time Nigeria has experienced such sharp hikes in petrol prices. In December 2024, prices ranged between ₦935 and ₦1,100 per litre across the country. However, the current surge represents one of the steepest increases in recent times, raising concerns about affordability and its impact on the economy.
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Economic Implications
The rise in petrol prices has far-reaching consequences for Nigeria’s economy:
- Increased Transportation Costs: Higher petrol prices drive up transport fares, affecting commuters and logistics companies.
- Inflationary Pressures: Rising fuel costs contribute to higher prices for goods and services, putting additional strain on households.
- Reduced Purchasing Power: With more income spent on fuel, consumers may have less to spend on other essentials.
How Nigerians Are Coping
The significant rise in petrol prices has forced many Nigerians to adjust their daily routines and spending habits. Consumers are now prioritizing fuel efficiency, exploring alternative transportation methods, and seeking out stations with lower prices, such as NNPC retail outlets.
What Lies Ahead?
The outlook for petrol prices in Nigeria remains uncertain. Key factors that will shape future trends include:
- Global Crude Oil Prices: Any further increase in crude oil prices could lead to additional hikes in petrol costs.
- Refinery Operations: The Dangote Refinery’s pricing policies and production capacity will continue to influence market dynamics.
- Government Policy: Regulatory measures and potential subsidies could play a role in stabilizing prices.
Conclusion
The recent surge in petrol prices to between ₦1,030 and ₦1,150 per litre highlights the challenges facing Nigeria’s energy sector and economy. As consumers grapple with rising costs, the need for long-term solutions to stabilize fuel prices and improve local refining capacity becomes more urgent.
For now, Nigerians must navigate this challenging landscape, balancing the cost of fuel with their daily needs.
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