Dangote Refinery Counts Losses After Petrol Price Crash as Marketers Ask FG to Halt Further Slash
- The Dangote Refinery may have lost a whopping N32.5 billion due to its petrol price in February
- Findings showed that the refinery, which said it had about 500 million litres in stock before the slash, may have sold the product at a lower-than-expected price
- Estimates showed that the refinery would earn about N445 billion from the 500 million litres of stock if sold at the old price of N890 per litre
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
The Dangote Refinery is projected to have lost about N32.5 billion due to the recent petrol price crash from the 500 million litres of PMS stock at the plant's gantry.
Before announcing the price slash, the chairman of the Dangote Group, Aliko Dangote, disclosed that the mega facility had over 500 million litres of petrol in stock.
Source: UGC
Dangote Refinery’s PMS price crash leads to losses
The explanation came when the facility sold petrol at N890 per litre.
According to reports, the 500 million litres of PMS will amount to N445 billion at the old rate of N890 per litre.
The refinery announced in February that it had crashed the ex-depot petrol price to N825 per litre from N890, resulting in a pump price of N860, meaning a N65 price difference.
The giant refinery said it has consistently reduced PMS prices and other petroleum products to benefit Nigerians. It said the recent crash was the second in February 2025 due to a fall in crude oil prices.
Dangote Refinery losses N32.5 billion
In total, the refinery has slashed petrol prices by N125 in one month from N970 per litre in January.
Dangote explained that during the Christmas and New Year holidays, the refinery reduced petrol prices by N70.50 from N970 per litre to ease the cost of living for Nigerians and subsequently caused a crash in transport fare.
Following the reduction, the 500 million litres of petrol sold at N825 per litre will reduce the company’s income margin from the projected revenue of N412.5 billion.
The development means the refinery sold 500 million litres, N32.5 billion lower than the project value of N445 billion.
Energy experts have suggested that the crash in crude prices and the relative naira stability would help the refinery recoup its losses.
Marketers count losses due to petrol price crash
Legit.ng earlier reported that marketers decried the constant price crash by the Dangote Refinery and the Nigerian National Petroleum Company Limited, saying the slashes have impacted their profit margins, leading to billions in losses.
The marketers asked for price stability and kicked against the monopolistic tendencies of refiners.
Punch reports that some of the marketers said the Dangote Refinery was gradually making imports unattractive due to incessant price drops, which is below the landing cost.
The marketers said they have tried to offload their imported products at low margins.
Marketers project new petrol prices
According to estimates, importers may lose N2.5 billion daily and N75 billion monthly due to the latest price reductions by Dangote and NNPC.
Findings show that many filling stations have reduced their pump prices below N900 per litre due to Dangote’s new price offerings.
Source: UGC
However, Nigerians have asked the Dangote Refinery to increase the number of petrol stations and partners selling its products nationwide.
A recent report disclosed that marketers have projected that PMS prices may drop to N800 per litre as the commodity’s landing cost is reduced to N783.66 per litre.
New petrol prices as crude oil prices fall
Legit.ng earlier reported that petrol prices may drop further from the current N860 per litre sold by Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPC).
This also came amid the strengthening of the Nigerian currency in the foreign exchange market.
Oil prices dropped about two per cent to a 12-week low following reports that OPEC+ will proceed with the planned oil output increase in April.
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Source: Legit.ng
