Dangote Refinery likely to lose N32b, importers also counting their losses
By Jeph Ajobaju, Chief Copy Editor
Dangote Refinery is likely to lose N32.5 billion from 500 million litres stock of fuel in its latest price reduction that has affected the bottom lines of marketers and retailers alike, but to the benefit of consumers and the national economy.
A few days before the refinery effected the ex-depot price cut to N825 per litre on February 27, its owner, Aliko Dangote, told journalists that the refinery had over 500 million litres of petrol in its tanks.
Dangote made the disclosure at a time the refinery was selling at N890 per litre.
Therefore, 500 million litres of petrol would amount to N445 billion if sold at the old rate of N890 per litre.
Dangote Refinery announced in a statement last month a reduction in the ex-depot price of fuel by N65, from N890 to N825 per litre, effective from February 27, the second price reduction this 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,” the statement stressed.
“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 PUNCH calculates that selling 500 million litres of PMS at N825 per litre will lower the company’s expected income from the stock to N412.5 billion.
It would sell the 500 million litres at N32.5 billion below the original value of N445 billion, likely wiping off its margins.
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.
However, fuel importers and marketers have lamented that price reductions by Dangote Refinery compel them to sell below landing cost and translate into billions of naira in losses.
Some of them said Dangote Refinery is making importation less attractive by the way it drops the prices of petrol and diesel that forces them to sell imported products with little or no margin.
Importers may lose an average N2.5 billion daily and N75 billion monthly following the latest fuel price cut by Dangote Refinery.
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