The Dangote Refinery has reduced its ex-depot price of Premium Motor Spirit back to N1,200 per litre, offering modest relief to Nigerian consumers following weeks of elevated pump prices driven by the Middle East conflict and global oil price volatility. The price adjustment reflects the recent easing of crude oil benchmarks following the US-Iran ceasefire announcement, which brought Brent crude down from peaks above $110 per barrel to the $95-100 range.
From a household expenditure perspective, the price reduction will ease transport costs and lower the prices of goods and services that depend on petrol for distribution. However, the reduction remains limited relative to the magnitude of the previous increase, which saw Lagos petrol prices peak at N1,325 per litre in late March. The new N1,200 price is still significantly above the pre-conflict level of approximately N830 per litre, meaning consumers continue to bear a substantial energy cost burden.
The refinery’s ability to adjust prices downward demonstrates market responsiveness to global crude movements, but it also highlights the limitations of domestic refining as a buffer against external shocks. Because the Dangote Refinery sources its feedstock at international prices, its ex-depot price tracks global benchmarks. This means that even with full domestic refining capacity, Nigerian petrol prices would remain exposed to fluctuations in crude oil markets. The only way to achieve genuine decoupling would be to build strategic reserves of refined products purchased at low prices and released during spikes, a policy the federal government has yet to implement.
