Competition in Nigeria’s downstream petroleum sector appears to be intensifying as Dangote Petroleum Refinery and Petrochemicals has reduced the ex-depot price of Automotive Gas Oil (AGO), popularly known as diesel, by N200 per litre.
The latest adjustment lowers the refinery’s gantry price from N1,800 per litre to N1,600 per litre, a development industry stakeholders say could bring temporary relief to businesses struggling with high operating costs.
The price cut, which reportedly took effect on May 26, comes at a time when independent marketers have resumed the importation of refined petroleum products into the country following the issuance of fresh import licences by regulators.
Operators in the sector believe the move signals growing competition between local refining and imported fuel supply, especially as more vessels carrying petroleum products arrive at Nigerian ports.
Confirming the development, the National Public Relations Officer of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Mr. Joseph Obele, linked the refinery’s decision directly to renewed import activities by marketers.
“Dangote Refinery recently instituted legal action after the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, approved import licences for some marketers to bring petroleum products into the country,” Obele said.
“Over the weekend, some of the vessels carrying imported products reportedly arrived, and shortly after, the refinery reduced the gantry price of diesel from N1,800 to N1,600 per litre.”
The reduction is the latest twist in the ongoing disagreement involving Dangote Refinery, fuel marketers, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), and the Nigerian National Petroleum Company Limited (NNPCL) over fuel importation and market control.
Industry observers say the diesel price adjustment may help reduce transportation, logistics and production costs if sustained over time, particularly for manufacturers and businesses that rely heavily on diesel-powered generators amid persistent electricity challenges.
Many factories, telecom operators and small businesses across Nigeria depend on diesel to maintain daily operations, making the product one of the most critical energy sources for the country’s industrial and commercial sectors.
The development also coincides with continued instability in the international oil market, where crude prices have remained volatile due to geopolitical tensions in the Middle East.
Brent crude, regarded as the global oil benchmark, reportedly fell to $95.05 per barrel on Wednesday from $98.04 recorded the previous day, reflecting shifting market sentiment over supply concerns and ongoing diplomatic negotiations.
Global energy markets have experienced sharp fluctuations since the outbreak of hostilities involving the United States, Israel and Iran earlier this year. The conflict disrupted major oil supply routes and heightened fears of shortages in global crude exports.
Particular attention has remained on the Strait of Hormuz, the strategic shipping route through which a significant portion of the world’s crude oil passes daily.
The temporary shutdown of the channel during the conflict sent shockwaves through global markets, forcing oil prices upward and increasing pressure on fuel-dependent economies.
Although Iran later reopened the Strait of Hormuz to commercial traffic following a ceasefire arrangement, uncertainty surrounding the region has continued to influence global energy prices.
Meanwhile, another major development in the oil market emerged recently after the United Arab Emirates (UAE) announced its withdrawal from the Organisation of the Petroleum Exporting Countries (OPEC) and the wider OPEC+ alliance after nearly 60 years of membership.
Analysts say the decision could reshape production dynamics within the global oil industry at a time when geopolitical tensions and energy security concerns are already dominating international discussions.
Despite these developments, market experts maintain that negotiations between the United States and Iran remain central to the future direction of global oil prices and supply stability.
On May 25, US President Donald Trump said discussions between both countries were progressing positively.
In a post shared on Truth Social, Trump said negotiations were proceeding “in an orderly and constructive manner,” while noting that both parties required additional time to finalise a workable agreement.
For Nigeria’s energy sector, however, the immediate focus remains on whether the latest diesel price reduction will translate into lower costs for consumers and businesses, or merely signal the beginning of a prolonged pricing battle between local refiners and fuel importers.