The Dangote Group has announced a reduction in the price of its Premium Motor Spirit (PMS), lowering it to N970 per liter from its previous rate of N990 per liter.

This adjustment comes as part of the refinery’s effort to support Nigerian consumers and marketers amid rising fuel price tensions. The announcement was made in a statement by Anthony Chiejina, the Group’s Chief Branding and Communications Officer, on Sunday.

Chiejina explained that this price reduction reflects the refinery’s commitment to offering competitive pricing while maintaining premium product quality.

He stated: “Dangote Petroleum Refinery has effected a reduction in the prevailing price of its Premium Motor Spirit (PMS) from N990/liter to N970/liter for the marketers. As the year comes to an end, this is our way of appreciating the good people of Nigeria for their unwavering support in making the Refinery a dream come true.”

The statement also reassured consumers of the quality of Dangote’s PMS, highlighting its environmentally friendly and sustainable properties. Chiejina added that the refinery is determined to ramp up production to meet domestic fuel consumption needs, reducing fears of supply shortages.

“While the refinery would not compromise on the quality of its petroleum products, we assure you of best quality products that are environmentally friendly and sustainable,” he said.

“We are determined to keep ramping up production to meet and surpass our domestic fuel consumption; thus, dispelling any fear of a shortfall in supply.”

The price reduction comes amidst ongoing tensions between Dangote Refinery and some marketers over the pricing of petrol. The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) criticized the refinery’s initial price of N990 per liter, arguing that importing PMS could be more cost-effective. PETROAN’s National Public Relations Officer, Joseph Obele, called for competition in the downstream sector to avoid monopolistic practices.

“The pricing from Dangote Refinery at N990 was inconsiderate, and we have finalized arrangements with foreign refinery partners to import high-quality PMS at a lower cost,” he said.

Obele refuted allegations from Dangote Refinery that PETROAN was planning to import substandard products, asserting that all products would meet regulatory standards.

However, Dangote Group countered these claims, asserting that significantly lower prices often indicate compromises in product quality or connections to oil theft. The company maintained that its products adhere to global regulatory standards, offering premium unleaded gasoline with 10ppm sulfur—a far superior quality compared to the 1,000ppm sulfur typically found in many imported fuels.

Kelvin Emmanuel, an energy and financial analyst, weighed in on the pricing debate, noting the quality gap between Dangote’s PMS and lower-cost imports.

He remarked: “The difference between Dangote selling at N970 and importers landing at N971 is significant. While they are landing substandard petrol of more than 1k ppm for sulphur, he’s selling premium unleaded gasoline of 10ppm sulphur that is accepted by regulators all over the world.”

Emmanuel likened the quality disparity to the contrast between luxury experiences, comparing a vacation in Bali to visiting a local destination (Oxbow Lake in Yenegoa), with far fewer amenities.

Dangote Refinery’s price reduction is seen as a strategic move to ease marketer concerns and foster stronger relationships within the sector. The Independent Petroleum Marketers Association of Nigeria (IPMAN) recently reached an agreement to lift petroleum products directly from Dangote’s facility, signaling improved collaboration.

The price adjustment also aligns with the refinery’s broader goal of addressing domestic fuel demands and reducing Nigeria’s dependency on fuel imports. However, industry analysts caution that Dangote Refinery’s competitive edge in quality and sustainability will need to be balanced with affordability to ensure long-term consumer and marketer support.

The Lagos Chamber of Commerce and Industry (LCCI) has voiced its concerns regarding the Federal Government’s plans to borrow $2.2 billion, emphasizing the risk of debt sustainability issues and its potential impact on critical infrastructure development.

This borrowing plan comes at a time when Nigeria’s fiscal challenges have deepened, driven by escalating debt servicing obligations, currency instability, and limited revenue generation.

The chamber, in a statement on Friday, signed by its Director-General, Chinyere Almona, warned that Nigeria’s growing debt profile, currently exceeding 50% of GDP, poses significant risks to economic stability.

Almona highlighted that debt servicing expenses have already begun to overshadow capital expenditure allocations. She noted that the concerns were driven by weak economic fundamentals and a lack of understanding of navigating through these challenges to a better economy in the near term.

She added that the country’s estimated debt-to-gross domestic product ratio of above 50 percent debt servicing expenses is set to swallow capital expenditure, and has already resulted in a debt of about $17 billion.

She stated, “The LCCI is taking the responsibility to, once again, warn about imminent debt sustainability issues and how that may further weaken the state of critical infrastructure in the country. The chamber has always advised against solely using debt financing without considering other options to fund budget deficits.

“A critical perspective of further borrowing is the risk of losing steam on infrastructure financing as debt servicing alone may rise above what is set aside for capital expenditure in the 2025 federal budget.”

The government’s increasing reliance on external borrowing, according to LCCI, also exposes the country to external currency shocks, particularly as the naira continues to weaken against the dollar.

Almona explained, “Another concern is the exposure to the external currency shocks that may result from the depreciation of the naira against the dollar in the course of servicing these accumulated debts.”

These challenges have been compounded by the Central Bank of Nigeria’s (CBN) struggle to stabilize the naira, despite various policy interventions aimed at boosting the foreign exchange supply, she added.

Recent data underscores the scale of Nigeria’s fiscal challenges. According to the 2025-2027 Medium Term Expenditure Framework and Fiscal Strategy (MTEF & FSP), Nigeria’s total debt servicing payments, including domestic obligations and interest payments on securitized borrowings, have already reached N5.51 trillion by August 2024, consuming 34.4% of the total budget.

Between January and August 2024, the cost of servicing foreign debts surged by 107.7%, reaching N3.8 trillion. This figure dramatically exceeds the N1.83 trillion budgeted for foreign debt servicing in the 2024 budget.

The surge in debt servicing expenses threatens to divert resources away from infrastructure projects critical to economic development.

Business leaders have urged the government to adopt alternative strategies to finance its budget deficit and stimulate economic growth. The government has been advised to intensify efforts to expand the non-oil revenue base through comprehensive tax reforms and foster growth in export-oriented sectors such as agriculture, manufacturing, and solid minerals.

Also, the government has been urged to privatize underperforming state-owned enterprises and enhance the efficiency of those retained under government control.

Increasing oil output, which has been constrained by theft and operational inefficiencies, is expected to significantly enhance government revenues.

The LCCI emphasized that stabilizing the naira and addressing structural issues in the foreign exchange market are urgent priorities. Almona explained that the government’s borrowing appetite must be managed prudently to prevent further weakening of the naira and to ensure that developmental objectives are not undermined by rising debt servicing costs.

She said funding critical business-supporting infrastructure like electricity supply, security for food production, logistics, and enabler manufacturing should be of utmost importance.

If you are in New York, you can buy an iPhone case and get it delivered from China, for less than $2, including shipping and the cost of the product. How is that possible?

If you live in Berlin, you can get a better electric vehicle at half the cost sold by the local car companies. How is that possible?

If you are in Sokoto, your concern on that container is the burden of moving it from Lagos to Sokoto, and not the wahala from China  to Lagos.

Simply, China has the world’s finest supply chain apparatus, and they have used technology to improve their marginal cost on logistics and broad space of supply chain systems. From warehouses with no humans to ports manned by robots,  they have gained competitive advantages on making and shipping things than any nation on earth. This video shows a small case: an automated sorting for packaging and shipping in a warehouse in China.

The challenge: if you can even make the product, can you ship it efficiently as China does?