Dangote Refinery sets high purchase minimum amid market price adjustments

The Dangote Petroleum Refinery has announced a reduction in the price of Premium Motor Spirit (PMS), commonly known as petrol, to N970 per litre, with a minimum purchase requirement of two million litres.

This development, shared via a flyer on the company’s official X (formerly Twitter) handle, positions Dangote as a key player in shaping Nigeria’s downstream petroleum market.

The flyer highlighted the premium quality of the PMS being offered, stating:

“High-quality PMS (Petrol) for your vehicles and engines, also good for the environment. Buy a minimum of two million litres @N970 per litre.”

This price cut, representing a N20 reduction from the previous N990 per litre, was confirmed by Anthony Chiejina, Group Chief Branding and Communications Officer for Dangote Group. He explained that the adjustment reflects the refinery’s commitment to market responsiveness and consumer affordability.

“Dangote Petroleum Refinery has effected a reduction in the prevailing price of its Premium Motor Spirit (PMS) from N990/litre to N970/litre for the marketers,” Chiejina stated.

While the price reduction has been welcomed, the high minimum purchase threshold of two million litres has raised concerns among smaller marketers and independent players. Industry observers note that this policy could effectively exclude many smaller-scale distributors, concentrating access among larger firms.

Energy economist and market analyst, Dr. Rotimi Ogunleye, remarked:

“The price reduction is a positive step, but the purchase minimum could present challenges for smaller players. This may inadvertently sustain a market structure where only major distributors can benefit, potentially limiting competition and consumer price relief.”

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In a related development, Farouk Ahmed, CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), expressed optimism about the Port Harcourt Refinery’s forthcoming operations. Ahmed projected that increased local refining capacity would lead to a further reduction in fuel prices.

“With the Port Harcourt Refinery set to begin production, we anticipate a positive shift in supply dynamics that should bring down petroleum product prices,” Ahmed said.

Experts have also highlighted Dangote Refinery’s role in driving environmental sustainability through cleaner fuel production. Energy consultant Dr. Adaobi Nnadi noted:

“The Dangote Refinery’s high-quality PMS is not just about price but also about environmental standards. This aligns with global trends prioritizing lower-emission fuels, which Nigeria must adopt.”

As the Dangote Refinery continues operations, the combined effect of its pricing strategies and the Port Harcourt Refinery’s potential contributions could reshape Nigeria’s downstream petroleum sector.

However, balancing accessibility for smaller marketers and competitive pricing remains a critical challenge for the industry.