Petrol and diesel prices have started declining in Nigeria following a sharp drop in global crude oil prices after tensions in the Middle East eased, although industry operators say further reductions are likely to be gradual.
The price adjustments were initiated by the Dangote Petroleum Refinery and subsequently adopted by some private depot operators, raising expectations of lower fuel costs for consumers in Africa’s largest oil producer.
The reductions come after crude oil prices fell from highs of around US$120 per barrel during the recent conflict involving the United States and Iran to about US$78 per barrel following a peace agreement reached on Sunday.
In response to the decline, the Dangote refinery cut its petrol gantry price by N75 per litre. The refinery had previously raised the price from N830 per litre to more than N1,300 per litre during the period of heightened geopolitical tensions.
Prices of diesel and aviation fuel were also reduced by N100 per litre each, with the refinery citing improved stability in the Middle East as a key factor behind the adjustments.
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However, some consumers have argued that the reductions remain modest compared with the scale of the decline in international crude oil prices.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) said the refinery was unlikely to introduce drastic price cuts in the near term, warning that such a move could inflict significant losses on fuel marketers holding existing stock purchased at higher prices.
According to IPMAN, a more gradual approach would help market participants adjust to changing price conditions without suffering severe financial setbacks.
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“The reduction will be systematic. If Dangote does that reduction holistically, it will certainly affect some people who have products, and they might not be able to sell the products. This will cost marketers huge losses,” IPMAN spokesman Chinedu Ukadike said.
Industry players say fuel pricing remains sensitive to movements in global oil markets and exchange rates, with refiners and marketers seeking to balance consumer expectations with commercial realities.
Analysts note that while lower crude prices could eventually translate into more affordable fuel, the speed and extent of reductions will depend on market conditions, inventory levels and competition among suppliers.
The latest cuts offer some relief to households and businesses grappling with elevated energy costs, although many consumers continue to hope for deeper reductions in the coming weeks if global oil prices remain subdued.
Nigeria fully deregulated its downstream petroleum sector in 2023, allowing fuel prices to be determined largely by market forces rather than government subsidies.
As a result, domestic pump prices have become increasingly responsive to fluctuations in international oil markets, making geopolitical developments a key driver of fuel costs across the country.
