When the Dangote Refinery announced in September 2024 that it would begin selling petrol to the Nigerian market, many breathed a sigh of relief as Africa’s largest refinery finally ended the country’s decades-long dependence on imported fuel.
Ten months on, the journey has been a roller coaster, as petrol prices have swung up and down in ways due to movement in global crude oil prices and changes in the exchange rate.
Data sourced from the National Bureau of Statistics (NBS) show that since September 2024, the average pump price of petrol has shifted at least 10 times, creating a volatile landscape for consumers, marketers, and policymakers.
The numbers tell a dramatic story. In September, petrol averaged N1,030.46 per litre, only to climb steadily through the last quarter of 2024, hitting N1,184.83 in October and N1,214.17 in November, before easing slightly to N1,189.12 in December.
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The new year brought little reprieve. In January 2025, prices surged again to N1,258.34 per litre, before dipping marginally in February to N1,245.80. By March, the cost reached its highest point at N1,261.65—about 22.4 percent higher than the September baseline.
Yet by May, the market had reversed sharply, plunging to N1,027.76 per litre, close to its original level. June steadied at N1,037.66.
By the end of the 10 months, the average pump price was just 0.7 percent higher than it had been at the refinery’s debut, though consumers had endured months of dramatic swings in between.
Behind the figures lies a complex mix of factors shaping the refinery’s impact, the structure of Nigeria’s downstream oil sector, and the broader economic environment.
Dangote’s influence on ex-depot prices
The price swings cannot be separated from decisions made at the refinery itself. As the sole domestic source of refined petrol on a large scale, Dangote’s pricing adjustments set the tone for marketers across the country. Since the beginning of 2025, the refinery has introduced several ex-depot cuts in an attempt to stabilise the market.
On February 1, the company lowered its ex-depot price from N950 to N890 per litre. That reduction was meant to ease the burden on retailers and consumers, but the relief proved short-lived, as average pump prices still climbed through March. Dangote cut again on August 12, this time from N850 to N820, underscoring its role as a key arbiter in the pricing chain.
Pricing strategy
Ezenwa Odiri, oil sector analyst, noted that the major input to the cost of refined products is the price at which refiners buy their crude oil with regard to the quality and specification. Other factors like shipping and transportation have less effects on the final price.
“Prices cannot go lower than what you bought the crude and your cost of refining. So, the cost of petroleum products will fluctuate directly with the price of crude,” Odiri noted.
He added, “Furthermore, our product importers look for the cheapest products abroad, and the price they get will depend on where the refineries get their crude. Some may even get cheap Russian crude.”
The factors, according to Odiri, are why petrol prices have little to no changes since Dangote’s entry.
“Dangote’s price cannot go lower than his costs. If you want lower prices in Nigeria, then you will have to subsidise Dangote’s crude,” he added.
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Jide Pratt, country manager of TradeGrid and COO of Aiona, also pointed out that one major assumption people make is that prices will reflect immediately crude prices change.
Pratt noted that Dangote Refinery employs a dynamic pricing strategy, adjusting petrol prices based on a combination of factors including global crude oil prices, local market conditions, and the need to maintain competitiveness with imported fuel.
“It’s also important to add that crude prices and refinery margin get to an ex refinery price. The refinery as a major price point determines her spread. So, the refinery has a better advantage on up or downwards reviews based on volume,” he added.
Consumers’ dilemma
For ordinary Nigerians, the price swings have translated into a rollercoaster experience at the pump. Many drivers and transport operators entered 2025 expecting some gradual stability. Instead, they have been forced to constantly adjust fares and fuel budgets, particularly during the March surge.
In Lagos, Tunde Ajayi, a commercial bus driver, described March as “the hardest month since the subsidy removal in 2023.” He explained that while passengers resisted fare hikes, fuel costs left operators with little choice. “You wake up one week and petrol has jumped again. How do you plan your life like that?” he asked.
The subsequent drop in May brought temporary relief, but it also reinforced uncertainty, leaving many wary of further swings. For households already squeezed by inflation in food, rent, and electricity, petrol has become an unpredictable burden that ripples through daily life.
A refinery in transition
Part of the volatility also reflects the refinery’s growth pains. Though it has begun supplying petrol, Dangote’s facility is still scaling operations and navigating logistical bottlenecks.
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The refinery was designed to process 650,000 barrels per day of crude oil, but reaching that capacity requires time, steady crude feedstock, and smooth distribution systems.
Delays in aligning with marketers and ensuring adequate transport infrastructure have also shaped the availability of fuel in different regions, sometimes widening price disparities between states.
Industry insiders suggest that once the refinery achieves more consistent output and distribution, price stability could improve. But for now, the learning curve is steep.
