The Dangote oil refinery will lose up to N32.5bn from 500 million litres stock of premium motor spirit following the recent price cut, The PUNCH reports.
A few days before the refinery announced a price slash, the President of the Dangote Group, Alhaji Aliko Dangote, had told newsmen that the refinery had over 500 million litres of petrol in its tanks.
This revelation was made at a period the refinery was selling a litre of petrol at N890.
Our correspondent reports that the 500 million litres of petrol will amount to N445bn if sold at the old rate of N890 per litre.
In a statement last month, the Dangote refinery announced a reduction in the ex-depot price of petrol by N65, from N890 to N825 per litre, effective from February 27, being the second price reduction in the new year.
“It is important to note that Dangote Petroleum Refinery has consistently lowered the prices of petrol and other refined petroleum products to the benefit of Nigerians. This marks the second price reduction of PMS in February 2025, following a previous decrease of N60 earlier in the month.
“Additionally, in December 2024, during the yuletide period, the refinery reduced the price of PMS by N70.50, from N970 to N899.50 per litre, as part of its commitment to easing the cost of living and providing relief to Nigerians during the holiday season. This reduction has positively impacted the overall cost of living, benefiting various sectors of the economy, and has also ensured that Nigerians did not experience the perennial fuel scarcity and price hikes typically associated with the yuletide season,” the company stated.
It was calculated that selling the 500 million litres of PMS at N825 per litre following the reduction will lower the company’s expected income from the stock to N412.5bn, probably ridding it of its margin.
This means the company must have sold the 500 million litres at N32.5bn below its original value of N445bn.
However, experts have suggested that the crash in crude prices and the marginal strength the naira gained lately against the dollar would help the refinery recover its losses.
Earlier, fuel importers and marketers lamented the consistent price reduction by the Dangote refinery, stating that they were losing billions of naira.
As Nigerians rejoiced over the price slash, fuel importers counted their losses as they were compelled to sell below the landing cost.
According to some of them, the Dangote refinery is gradually making importation less attractive with the manner in which it has dropped the prices of petrol and diesel lately.
The importers said they have been managing to sell the imported products with little or no margin due to the need to compete well in the market.
The PUNCH estimates that importers may lose an average of N2.5bn daily and N75bn monthly following the latest PMS price reduction announced by the Dangote refinery.
Marketers with old stocks also lamented that they had incurred heavy losses with the latest price reduction.
But they were not the only ones affected by the development; even the refinery will have to sacrifice billions of naira.
Our correspondent confirmed that many filling stations had lowered their pump prices below N900 per litre following the reduction by the Dangote refinery.
The Nigerian National Petroleum Company Limited retail stations dropped prices to N860 per litre in Lagos.
Meanwhile, Nigerians have appealed to Dangote to increase the number of filling stations selling its petroleum products across Nigeria.
However, marketers have projected that petrol prices may drop to N800 as the landing cost now stands at N783.66 per litre, according to the Major Energies Marketers Association of Nigeria.
