Dangote Refinery, Stronger Naira Driving Petrol Prices Down — Oil Marketers Explain

The recent drop in petrol prices across Nigeria has been attributed to increased domestic refining by Dangote Refinery, a strengthening naira, and improved supply chain efficiency.

Oil marketers say these factors have helped ensure steady supply, subdued smuggling pressures, and brought competitive pricing into the downstream sector easing the burden on Nigerian consumers.

The Dangote Refinery has significantly altered the country’s petroleum product market since it began partial operations, with multiple price cuts recorded through 2025 and a fresh pledge to supply over 1.5 billion litres of petrol monthly beginning in December.

Marketers Credit Refinery Output and Naira Gains for Price Decline 

Speaking to Nairametrics, the Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, confirmed that petrol prices are on a downward trend and attributed this to growing output from the refinery and gains in the naira’s value.

“Yes, the prices are going down. It has to do with one, production increase by Dangote. Two, the value of dollar. So, you know now that the dollar is coming down. It’s getting better. The more the dollar goes down, the better,” Ukadike said.

Another marketer, Kingsley Smart, who manages a fuel distribution company in Abuja, explained that supply-side improvements have eliminated scarcity and stabilized the market.

“The recent decrease in the price of Premium Motor Spirit (PMS) is primarily due to a combination of improved supply chain efficiencies. Previously, getting the products, especially at this time of the year, can be a bit challenging for independent marketers. But now, with government’s recent assurances that there will be enough supply, thankfully there is no panic buying,” he told Nairametrics.

He also highlighted how both NNPC and Dangote had reduced their depot prices in response to broader market dynamics, including a mild drop in international crude prices.

“This may be as a result of the fact that there is improved domestic refining capacity now than before… All these and more put together make the price come down.” 

Dangote Refinery denies tariff reversal influence 

Dangote Refinery, for its part, has continued to adjust prices downward throughout the year.

In August 2025, petrol sold for around N850 per litre, later dropping to N820, and in November, the refinery further cut its gantry price to N828 and reduced coastal prices from N854 to N806 per litre.

This statement was also supported by actions on the ground, as independent marketers began adjusting pump prices to match and in some cases, undercut Dangote’s pricing.

The development followed earlier expressions of full government support, including the Federal Executive Council’s (FEC) October endorsement of the refinery’s scale-up to 1.4 million barrels per day (bpd) — aimed at meeting local and regional demand.

Nigerian Petrol Still 55% Cheaper 

Despite the progress, Dangote has warned that petrol smuggling remains a threat to domestic fuel stability.

During a press briefing after meeting with President Bola Tinubu at the State House in Abuja, Aliko Dangote acknowledged that regional price disparities continue to incentivize smuggling.

“Prices are going down. The reason why prices have to go down is that we also have to compete with imports. But you know, luckily for us, now smuggling has reduced — not totally,” Dangote said.

“There is still quite a lot of smuggling, because the price we have in Nigeria is about 55% of the price of our neighbouring countries. So, it doesn’t matter how you police the borders, people will still smuggle because there’s so much money to be made. They are selling at almost N1,500, N1,600 [per litre], but we’re selling at about N800 and something.” 

Cross-Border Trade to Deter Smuggling 

To tackle this, the Nigerian government has intensified border enforcement, especially in the northern axis.

According to IPMAN’s Ukadike, efforts like “Operation Whirlwind”, spearheaded by the National Security Adviser (NSA) and Nigeria Customs, have improved border security.

“They are trying to do their best to ensure that we close the borders, with also massive military presence… especially at the northern axis,” he said.

Ukadike also pointed out that Dangote Refinery is already exporting products legally to neighbouring countries, offering a sustainable alternative to black-market trade.

“Dangote is also exporting to neighbouring countries at very good rates. So, the essence of smuggling will also be defeated… if these products are being supplied to these African countries surrounding Nigeria.” 

He added that independent marketers now operate extended hours, even into late nights, reflecting greater supply confidence.