Dangote Refinery Has The Potential to Significantly Reduce Inflation in Nigeria – FDC

July 6, 2025

The Dangote Petroleum Refinery has been recognised as capable of alleviating the ongoing inflation in Nigeria, following the recent report by the Financial Derivatives Company (FDC) Limited, a prominent economic policy researcher.

In its July Executive Breakfast Presentation for the Lagos Business School (LBS), FDC emphasized that the refinery’s operations, particularly its uniform pricing strategy and credit facilities extended to fuel marketers are already reshaping Nigeria’s downstream petroleum sector and offering much-needed relief in the current economic climate.

During the presention of the report, FDC’s Managing Director and CEO, Mr. Bismarck Rewane, described the refinery as a “Game Changer,” citing its potential to reduce petrol prices, lower transport fares, and ultimately reduce inflationary pressure across key sectors of the economy.

“Dangote’s uniform pricing and credit to marketers is a catalyst for more private sector investment,” the report noted. “This initiative is set to revolutionize Nigeria’s downstream oil business by cutting logistics costs and saving over ₦1.7 trillion annually.”

A major highlight of the report is the refinery’s innovative fuel distribution strategy, which involves deploying 4,000 Compressed Natural Gas (CNG)-powered trucks across the country. This, according to FDC, will deliver refined products directly to end-users, reduce pump prices, and provide crucial support for over 42 million micro, small, and medium enterprises (MSMEs) nationwide.

The report also examined the broader implications of this strategy on inflation: “With direct-to-user delivery, the cost of transportation and distribution will drop significantly, helping to stabilise consumer prices and reduce the cost burden on Nigerian households and businesses,” it stated.

FDC further addressed the oil price paradox affecting Nigeria’s economy—where rising global oil prices benefit government revenues and bolster the naira, yet yield little relief for ordinary citizens. Conversely, falling prices offer short-term gains for consumers but negatively impact national revenue.

On the global economic landscape, the think tank observed a shift from market pessimism to overconfidence, warning that momentum traders and speculators are now exploiting this volatility for gain, often at the expense of long-term stability.

The report ultimately positions Dangote Refinery as not just a commercial venture, but a strategic national asset that can help reshape Nigeria’s economic trajectory.

Integritynews.com.ng