Dangote Refinery drives oil sector growth, cuts PMS price by N65 to N825

BY MOTOLANI OSENI

Dangote Petroleum Refinery is playing a key role in Nigeria’s oil sector revival, marked by the first quarterly growth in five years. The Nigerian oil refining sector saw a notable 9.59 per cent real GDP expansion in the fourth quarter of 2024, a significant rebound after years of contraction.

This growth is largely attributed to the commencement of operations at the Dangote Refinery, the world’s largest single-train refinery, with a capacity of 650,000 barrels per day.

The refinery has not only reduced Nigeria’s reliance on imported refined petroleum products but has also helped stabilize the domestic fuel supply and bolstered Nigeria’s trade balance.

Dangote Refinery has further enhanced its impact by slashing the price of Premium Motor Spirit (PMS) by N65, from N890 to N825 per litre, making it the second price reduction in February 2025 alone, following a previous N60 drop earlier in the month.

This price reduction is part of the refinery’s broader strategy to provide relief to Nigerians, particularly in the lead-up to the Ramadan season, while supporting President Bola Ahmed Tinubu’s economic recovery plan.

The price drop has also eased the cost of living, ensuring that Nigerians pay between N860 and N865 per litre at the pump in Lagos, depending on the retailer.

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The Dangote Refinery’s success is driving a broader positive trend in Nigeria’s oil sector. Overall, the oil sector saw a 5.54% growth in 2024, reversing the 2.22% contraction in 2023. This is supported by an increase in crude oil production, from 1.44 million barrels per day in 2023 to 1.5 million barrels per day in 2024, coupled with government reforms aimed at boosting the oil industry’s growth.

With Dangote’s refinery boosting domestic refining capacity and reducing fuel imports, Nigeria’s oil sector is positioning itself for greater self-sufficiency and economic resilience.

However, challenges such as regulatory uncertainties and infrastructure deficits remain, requiring continued policy reforms and investments.

As Dangote Refinery continues to expand, it is set to enhance Nigeria’s global competitiveness, improve foreign exchange earnings, and help drive the country’s economic diversification.