Fuel prices hit ₦1,370 in Abuja

Nigeria's petrol prices remain stubbornly elevated at ₦1,370 per litre in Abuja, marking the second consecutive week of sustained high costs for consumers. Premium Motor Spirit (PMS) across filling stations in the capital is trading in a tight band between ₦1,364 and ₦1,372 per litre, reflecting both the continued dominance of dollar-denominated crude benchmarks and lingering supply-side constraints despite recent refinery developments.

The persistence of these price levels comes against the backdrop of crucial statements from Africa's richest man, Aliko Dangote, whose downstream energy investments remain central to Nigeria's fuel independence narrative. Dangote Group recently denied media reports suggesting rifts with business leader Tony Elumelu or irregular financing of the Dangote Petroleum Refinery through undisclosed personal borrowing. This clarification matters: it underscores the institutional credibility and transparent capital structure underpinning what is Africa's largest single-location refinery—a facility whose full operational capacity could fundamentally reshape Nigeria's fuel cost dynamics.

## Why Are Fuel Prices Staying This High Despite Dangote Refinery Commissioning?

The refinery began crude processing in January 2024, yet prices have not collapsed to pre-subsidy removal levels. Three factors explain the plateau. First, production ramp-up takes time; nameplate capacity of 650,000 barrels per day is not instantly achieved. Second, global Brent crude remains volatile—currently trading in the $75–82/barrel range—which directly feeds into the naira-denominated pump price. Third, retail margins, distribution costs, and the naira's depreciation against the dollar (now hovering around ₦1,500/$1) compress any wholesale savings at the consumer level. The refinery's output is dampening price volatility, not erasing it entirely.

## What Do Dangote's Denials Signal for Investor Confidence?

Dangote Group's swift rejection of financing allegations suggests management is protecting institutional and capital-market credibility ahead of potential debt or equity raises. The group's refinery is now Africa's most critical energy infrastructure asset; any perception of governance weakness could increase the cost of future capital. By publicly reaffirming the refinery's financing transparency, Dangote is signalling to multilateral lenders, development finance institutions, and international investors that the project remains on solid footing. This matters for downstream price stability: a well-capitalized refinery can sustain output and absorb crude procurement costs better than a financially fragile one.

## How Do Current Prices Impact Nigeria's Inflation and Competitiveness?

At ₦1,370/litre, transport costs remain elevated, which ripples through consumer goods pricing and logistics. However, the price is 30–40% lower than the unsubsidized peak of ₦1,800+ in mid-2023, offering modest relief. For manufacturing and e-commerce sectors, this range is workable but not competitive versus regional peers like South Africa. Continued domestic refining capacity will gradually suppress prices; by mid-2025, if Dangote achieves 80%+ nameplate capacity, pump prices could drift toward ₦1,200–₦1,300 per litre under stable global conditions.

The Dangote refinery's successful denial of governance doubts, combined with second-week price stability, suggests the market is entering a new equilibrium—higher than pre-2022 but vastly more sustainable than the chaos of the subsidy era.

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