The possibility of petrol prices dropping to N500 per litre by 2025 hinges on both local refining capacity, led by the Dangote Refinery, and global crude oil trends. Industry stakeholders in Nigeria’s petroleum sector remain optimistic, citing increased competition and operational milestones at local refineries as pivotal factors for price reductions. Recent reports indicate that the Dangote Refinery and the Nigerian National Petroleum Corporation (NNPC) have already reduced their ex-depot prices to around N899 per litre, driven by expanding production volumes and competitive pricing strategies. However, whether this trend can push petrol prices further down to N500 per litre depends on sustained operational capacity, policy reforms, and global oil price stability.
The global crude market’s trajectory will play a critical role in determining domestic fuel costs. Analysts suggest that oil prices could average around $60 per barrel by 2025 if OPEC+ maintains its current production strategy. However, market disruptions, including potential price collapses below $50 per barrel, could introduce downward pressure on global fuel prices. If Nigeria can secure stable and affordable crude inputs for its refineries, the cost savings could translate into lower petrol prices locally. However, the challenge of foreign exchange volatility remains significant, with the naira’s instability continuing to affect import costs and refinery operations reliant on imported components.
Domestically, the improved operational efficiency of Nigeria’s refineries, particularly Dangote, Port Harcourt, and Warri, is a positive signal for price reduction. The Warri Refinery recently commenced operations at 60% capacity, producing kerosene, diesel, and naphtha, while the Dangote Refinery has injected over seven million litres of petrol into the market. As these facilities ramp up output, the reliance on imported refined products may decline, reducing costs associated with shipping, import levies, and currency fluctuations. However, logistical challenges, such as the delayed rehabilitation of the Kaduna Refinery, highlight the risks to consistent local supply and pricing.
Ultimately, while a N500 per litre petrol price by 2025 seems plausible under optimal conditions, it requires the convergence of multiple factors: consistent domestic crude supply, stable global oil prices, and improved naira performance. With the ongoing expansion of local refining capacity and market reforms, industry experts believe a price reduction could be achievable, but uncertainties in currency stability and global oil dynamics may still pose barriers to reaching this target.
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