Dangote Petroleum Refinery has cut petrol prices for the fourth time in a month, slashing ex-depot rates by another N50 per litre. The cumulative reduction now exceeds N200 per litre as the refinery gradually passes on savings from cheaper crude oil to consumers.
International crude oil prices have fallen sharply from recent peaks, easing pressure on Africa's largest refinery after months of absorbing high feedstock costs. The company says it's pursuing a phased pricing approach tied to actual production economics rather than daily swings in global oil markets.
"Today's N50 per litre reduction is the fourth price cut in one month, bringing cumulative reductions to above N200 per litre on PMS," the refinery said in a statement on Wednesday. "This approach ensures that pricing decisions are anchored on actual production economics and inventory costs rather than short-term fluctuations in international oil markets."
The move intensifies competition in Nigeria's deregulated fuel sector, where marketers regularly adjust pump prices in line with refinery ex-depot adjustments. Dangote sought to explain why domestic fuel costs don't immediately track Brent crude declines.
The company noted that crude oil purchased weeks or months before processing doesn't follow daily international quotations. "Crude oil is procured weeks, and in some cases months, before it is processed, under commercial contracts linked primarily to monthly average pricing mechanisms rather than prevailing spot market prices," it said.
Feedstock costs include more than headline Brent prices, the refinery added, encompassing Dated Brent premiums, freight charges and logistics expenses that substantially raise the actual landed cost. In an unusual transparency move, Dangote published detailed records of crude cargoes discharged in May and June.
The refinery received 24 crude cargoes in May totalling 21.47 million barrels at a combined landed value of approximately $2.68 billion. This worked out to an average landed cost of $124.80 per barrel.
June figures showed improvement but remained elevated compared to current market rates. The refinery discharged 21 cargoes amounting to 18.93 million barrels, costing about $1.80 billion, with average landed costs falling to $95.25 per barrel.
Those figures dwarf the current Brent benchmark of around $71 per barrel, according to the refinery. "Consequently, the petroleum products currently being supplied from our refinery are being produced from crude inventories acquired at substantially higher costs than today's market prices," the statement noted.
The crude oils processed include Nigerian grades such as Bonny Light, Qua Iboe, Escravos, Forcados, Amenam, Agbami and Bonga, alongside imported varieties. The refinery's strategy suggests further price reductions may follow as cheaper cargoes replace expensive inventories in the coming weeks.
