Nigeria's Oil Production Peaks by 2025 Due to Dangote Refinery's Reduction in Petrol Costs
In a significant move for the Nigerian oil industry, Dangote Petroleum Refinery announced a reduction in the ex-depot (gantry) price of Premium Motor Spirit (PMS) from ₦850 to ₦820 per litre, effective from August 12, 2025. This price cut reflects the Dangote Group's commitment to national development and consumer satisfaction.
The decision to lower fuel prices comes as the refinery reported a monthly production increase. On a month-on-month basis, production rose by 1.0% from 1.543 million bpd in June 2025, marking the highest monthly production level recorded in 2025 so far. This surge in production surpasses OPEC's 1.5 million bpd quota for Nigeria for the third time in 2025.
However, it's important to note that despite the increase, the current level of production remains below the 2025 budget benchmark of 2.06 million bpd, $75 per barrel, and N500/$ exchange rate. The market is still witnessing competition among operators in response to Dangote's pricing strategy, with other operators adjusting their depot prices in response to the refinery's price reduction.
In a broader context, the voluntary cuts by OPEC+ (which includes some non-OPEC countries like Russia) are ending in September 2025, restoring production capacity to earlier quota levels. While OPEC has agreed on a collective quota increase from September 2025, detailed country-level quota allocations, including Nigeria's specific quota for the remainder of 2025, have not been made publicly available.
Fluctuations in the international oil market will continue to influence developments in Nigeria's downstream sector, with further adjustments likely in the coming months. The continuation of monthly meetings suggests that quotas might be adjusted based on market conditions and compliance assessments.
In a separate development, Dangote Petroleum Refinery will begin phased deployment of 4,000 Compressed Natural Gas (CNG)-powered trucks for fuel distribution across Nigeria from August 15, 2025. This initiative is expected to contribute to a cleaner and more sustainable fuel distribution system in the country.
As of now, no new information about the petrol price reduction announced by any other entity besides Dangote Petroleum Refinery has been made available. For the most accurate, official individual country quotas, one would typically consult OPEC’s official announcements or detailed monthly reports released by OPEC secretariat after formal meetings.
References: 1. OPEC announces increase in production quotas 2. OPEC+ production cuts: What you need to know 3. OPEC basket crude oil price 4. OPEC+ production vs. quotas 5. OPEC and the global oil market
- Other businesses in the Nigerian oil-and-gas industry are responding to Dangote Petroleum Refinery's price reduction for Premium Motor Spirit (PMS), causing competition among operators to adjust their depot prices accordingly.
- Despite Dangote Petroleum Refinery's increased production, it still falls below the 2025 budget benchmark, highlighting the ongoing struggle to meet targets in the energy sector.
- In a related move, Dangote Petroleum Refinery plans to deploy 4,000 Compressed Natural Gas (CNG)-powered trucks for fuel distribution, aiming to create a cleaner and more sustainable industry in Nigeria.
- With OPEC+ production cuts ending in September 2025, there remains uncertainty about individual country quotas beyond that point, which will continue to influence developments in Nigeria's oil-and-gas industry and the national economy.
