PMS Price Drop: Dangote Refinery’s Role and the Policy Questions Ahead
By Muhammad Isah Ramat The recent reduction in the pump price of Premium Motor Spirit (PMS) to about ₦700 per litre has been widely welcomed by Nigerians. While the federal government has linked the development to ongoing reforms in the petroleum sector, industry analysts point to the emergence of the Dangote Refinery as a major factor influencing the new pricing dynamics. Nigeria’s state-owned refineries in Port Harcourt, Warri and Kaduna remain largely non-operational despite years of rehabilitation efforts and significant public spending. As a result, fuel supply has historically depended on importation, exposing prices to foreign exchange volatility and global market shocks. The entry of the 650,000 barrels-per-day Dangote Refinery—the largest in Africa—has introduced a new supply reality. Even before full nationwide distribution, its production of PMS has increased competition in the downstream market and reduced the pricing power previously held by fuel importer...