Dangote Refinery adds pressure as marketers rush to offload imported fuel.
RIPPLES NIGERIA
Petrol prices in Nigeria have dropped sharply due to a supply glut and rising competition between importers and emerging local refineries. A spike in Premium Motor Spirit (PMS) imports, ahead of expected domestic output, has flooded the market.
“There is too much supply chasing limited demand,” said one fuel marketer. “Everyone is attempting to sell before prices continue to decline.”
With the Dangote Refinery slowly ramping up operations, and smaller modular refineries contributing to output, local competition is intensifying. This is reducing Nigeria’s long-standing reliance on fuel imports.
Economists say reduced imports will ease foreign exchange pressure and bolster the naira, with potential positive effects on Nigeria’s Eurobond outlook.
However, thinner margins may force smaller marketers out. Local refineries, while positioned for long-term gain, face pressure to stay price-competitive against discounted imports.
Despite volatility, the current price drop is driven by market forces, not subsidies — signaling the government’s commitment to fuel deregulation.