The Dangote Refinery has sent shockwaves across the fuel market by announcing a reduction in the ex-depot price of petrol by N65, from N890 to N825 per liter. This move, which takes effect on February 27, has forced importers of Premium Motor Spirits (PMS) to adjust their prices, sparking concerns over revenue and market competition.

The refinery's decision is intended to support President Bola Tinubu's economic recovery plan and prepare for the Ramadan season. This marks the second price reduction of PMS in February 2025, following a previous decrease of N60 earlier in the month. According to the refinery, this strategic price adjustment aims to ease the financial strain on Nigerian citizens.

However, importers are feeling the heat of Dangote's decision, with many voicing concerns that they will be forced to sell below their cost prices. "Some of us who have imported PMS are feeling the heat of Dangote's decision to slash prices. Though it is a good thing to reduce petrol price, it is taking a toll on our business. That's the simple truth," a dealer who spoke to the Punch in confidence stated.

Another dealer claimed that numerous importers will have to quit bringing in petroleum goods from other nations as a result of the Dangote refinery's price reductions, which are aimed at deterring gasoline importation. "Dangote understands the competition in the business and this latest reduction will further discourage fuel imports. There will be losses as we may have to drop our prices too. At the end of the day, some of us will source our products locally. I will just advise Dangote to create a level playing field for all," the retailer stated.

According to recent information, PMS's landing cost was around N927 per liter, which is more than Dangote's ex-depot price. This means that importers have been selling the imported goods with little to no margin, making it difficult for them to compete with the refinery's reduced prices.

It's worth noting that 60% of Nigeria's domestic petrol supply is coming from the Dangote Refinery, as reported by S&P Global. While this is an impressive feat, it also highlights the significant role that imports still play in the country's fuel market.

The implications of Dangote Refinery's price reduction are far-reaching, with potential consequences for revenue, market competition, and the overall fuel industry in Nigeria. As the market continues to adjust to this new development, it remains to be seen how importers will adapt to the changed landscape and what measures the government will take to ensure a level playing field for all stakeholders.

In conclusion, the Dangote Refinery's decision to reduce the ex-depot price of petrol has sent shockwaves across the fuel market, forcing importers to adjust their prices and sparking concerns over revenue and market competition. As the industry navigates this new reality, it's clear that the ripple effects of this move will be felt for some time to come.