admin The Dangote Refinery has recently announced a big increase in the price of Premium Motor Spirit (PMS), also known as petrol. This price increase has led to a rise in fuel prices across Nigeria, with consumers now facing the possibility of paying as much as ₦1,150 per liter.
The Dangote Refinery is a $20 billion project that was expected to be a game-changer for Nigeria’s energy independence. However, the refinery’s pricing decisions are now directly affecting the lives of millions of Nigerians. The refinery started operations in 2022 and had initially offered a “holiday discount” to Nigerians, setting the ex-depot price at ₦899.50 per liter in December 2024. But this relief was short-lived, as the refinery recently announced a new price hike, raising the ex-depot price to ₦955 per liter for purchases between 2 million and 4.99 million liters, and ₦950 per liter for purchases of 5 million liters and above.
This represents a ₦55 or 6.17% increase from the previous price, a move that has caused widespread concern and criticism among Nigerians. The Independent Petroleum Marketers Association of Nigeria (IPMAN) has confirmed that the new Dangote Refinery prices will result in retail prices exceeding ₦1,100 per liter across their member stations nationwide.
“Customers will likely pay over ₦1,150 per liter at places far from the depot, while places close to the depot will pay ₦1,100. This is because we will add about ₦50 for transportation costs. Right now, ex-depot prices have increased to ₦980,” said Chinedu Ukadike, the spokesperson for IPMAN.
The Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) has also commented on the situation, acknowledging the impact of the Dangote Refinery’s price hike. Billy Gillis-Harry, the president of PETROAN, said that although it is too early to predict the exact retail price after the refinery’s upward review, it is certain that the product will cost more.
Potential Impact on the Nigerian Economy
The fuel price increase has also raised concerns about the potential impact on different sectors of the Nigerian economy, including transportation, manufacturing, and small businesses. The higher fuel prices are expected to lead to an increase in the cost of goods and services, further straining the budgets of Nigerian consumers.
In response to the situation, the Nigerian government has said it is committed to ensuring a stable and affordable energy supply for the country. The Nigerian National Petroleum Company Limited (NNPCL) has maintained its retail price at ₦965 per liter, providing a temporary relief for consumers. However, the long-term sustainability of this strategy is uncertain, as the NNPCL will eventually need to align its prices with the prevailing market conditions.
The Dangote Refinery’s price hike has also raised questions about the government’s role in regulating the fuel market and ensuring fair pricing for consumers. Some have called for the government to intervene and set price controls, while others argue that a more market-driven approach is necessary to encourage investment and competition in the energy sector.
Diversifying Nigeria’s Energy Sources
The situation has also highlighted the need for Nigeria to work faster to diversify its energy sources and reduce its reliance on imported fuel. The Dangote Refinery’s price hike has shown the vulnerability of the country’s energy security and the importance of developing domestic refining capacity to protect consumers from global price fluctuations.
In this regard, the government’s efforts to revive the country’s old refineries and explore alternative energy sources, such as liquefied natural gas (LNG) and renewable energy, have become increasingly important. The recent announcement about the construction of LNG plants in Ajaokuta, which are expected to promote cleaner energy, is a step in the right direction.
However, the success of these initiatives will depend on the government’s ability to address the various challenges that have affected the energy sector, including infrastructure problems, inconsistent policies, and corruption.
Balancing Interests and Seeking Sustainable Solutions
As Nigerians deal with the impact of the Dangote Refinery’s price hike, the government and industry stakeholders must work together to find sustainable solutions that balance the interests of the refinery, the consumers, and the broader economy. This will require a comprehensive and transparent approach to energy sector reforms, with a focus on ensuring energy security, affordability, and environmental sustainability.
In the meantime, Nigerians are left to navigate the complexities of the fuel price landscape, adjusting their budgets and lifestyles to accommodate the higher costs. The burden of these price increases will be felt across various sectors, with the potential to worsen the country’s economic challenges and further strain the already tight household budgets.
The Dangote Refinery’s price hike has brought Nigeria’s energy sector into the spotlight, highlighting the need for a more robust and resilient energy infrastructure that can withstand global market fluctuations and provide affordable and reliable energy solutions for all Nigerians. As the country continues to navigate this challenging situation, the government, industry players, and the public must work together to find lasting solutions that prioritize the well-being of the Nigerian people.
