In December 2025, Dangote Petroleum Refinery made a bold move that should have eased the strain on millions of Nigerians – it cut its petrol ex-depot price to ₦699 per litre, down from ₦828. This marked roughly the 20th petrol price adjustment by the refinery this year as competition intensifies and production scales up. The latest cut represented a N129 per litre drop, or about 15.6%, and was touted as part of a strategy to bring relief to households and businesses ahead of the festive season.
Yet despite this significant cut at the source, the reaction across Nigeria has been eerily muted. No cascade of lower transport fares. No meaningful drop in food prices. No visible breathing space for struggling households. That stark contrast has left many asking a painful question:
> Why do price reductions at the source not translate into relief on the ground?
Let’s unpack the layers of this paradox — a story of price signals, economic pressures, and behavioural realities that shape everyday life in Nigeria.
🛢️ Petrol Price Cut: A Rare Positive Signal
First, the facts:
Dangote cut petrol price from ₦828 to ₦699 per litre.
This reduction was confirmed as taking effect from 11 December 2025 and widely reported across multiple national outlets.
The refinery’s Chairman, Aliko Dangote, also reiterated plans to keep prices reasonable and competitive, while competition with imported fuel continues to shape the market.
Some private depots have begun adjusting their prices in response, though marginally.
Subsequent announcements hinted that petrol might sell at around ₦739 per litre at the pump in some stations, though implementation remains patchy.
In a normal market, a 15–20% reduction in a key input like fuel should ripple through the economy, easing transport costs, lowering production costs, and ideally resulting in broader price relief.
But in Nigeria today, that logical economic domino effect is nowhere to be seen.
🚍 Transport Fares Still Sky‑High
Across major cities, commuters are still paying premium rates for transport. Ride‑hailing, buses, and shared taxis show no sign of lowering fares — even weeks after the petrol price cut was announced.
This disconnect between petrol pricing and transport costs reflects deeper structural issues:
Transport pricing often reflects supply and demand, not fuel costs alone. Operators hedge against fuel volatility and other unpredictable expenses.
High operational costs — such as vehicle maintenance, spare parts (often imported), and logistics — have been rising, making transport operators less willing to pass savings to consumers.
Behavioral inertia: once a fare level becomes the norm, lowering it can reduce earnings and is resisted.
In real terms, many Nigerians see no benefit from lower ex‑depot fuel costs. This signals a breakdown in the transmission mechanism between wholesale fuel price movements and everyday prices.
🍞 Food Prices and Everyday Essentials
If cheaper petrol doesn’t lower transport costs, it certainly won’t lower food prices — and that’s precisely where Nigerians feel the pain most deeply.
According to economists and recent analyses:
Food inflation remains painfully high, even as headline inflation shows signs of easing.
Low‑income families often spend 60‑70% of their income on food, meaning even small price increases have devastating effects.
Transportation accounts for a significant portion of food‑to‑market costs — higher logistics costs push up prices at every stall and supermarket.
The end result? A plate of basic commodities — tomatoes, rice, garri, bread — costs far more than it should, irrespective of falling petrol prices.
🏠 Rent and Shelter: The Silent Crisis
While petrol prices made headlines, house rents have quietly spiralled out of control. Data shows that:
Urban rents, especially in cities like Lagos and Abuja, remain among the highest across Africa when converted to comparative global benchmarks.
Even middle‑income earners struggle to afford reasonable housing costs — forcing relocation, crowding, or prolonged renting cycles.
This price pressure is driven by:
Speculation and supply shortages, rather than energy costs alone.
High construction input costs, which include cement and steel — both impacted by currency weakness and import dependency.
Weak rental market regulation, allowing landlords to set prices with little accountability.
📉 The “Inflation Illusion”: Why People Feel Worse Than Statistics Show
Interestingly, official inflation figures have eased in recent months, thanks to statistical adjustments and a drop in headline rates — which can be interpreted as progress.
Yet the average Nigerian doesn’t feel this improvement:
Food prices remain high, despite headline inflation easing.
Transport costs remain elevated, uncoupled from fuel price movements.
Peripheral costs, like electricity for small businesses and school fees, are also increasing.
This divergence between data and lived experience highlights a troubling reality: price indices can improve while real lived costs do not.
🧠 So Why Does Nigeria Feel This Way?
At the surface, many factors contribute:
📌 1. Market Imperfections and Pass‑Through Failure
Price cuts at the refinery do not automatically translate into lower retail prices due to:
Markup layers in distribution.
Weak regulatory enforcement.
Marketers and middlemen who set prices based on maximizing profits, not passing on savings.
📌 2. Cost Structures Beyond Fuel
Transport, food, housing, and services have many inputs beyond petrol.
For example:
Electricity tariffs have surged, adding costs for businesses.
Foreign exchange instability continues to inflate dollar‑denominated inputs.
📌 3. Behavioural Economics at Work
People — businesses and consumers — tend to anchor prices at the highest recent level, not adjust downward quickly. Once a ₦80,000 bus fare becomes the norm, dropping it to ₦60,000 feels like a loss — even if petrol costs drop.
📌 4. Deep Structural Economic Issues
Decades of subsidy reliance, import dependency, and weak industrial policy mean Nigeria still imports essentials, keeping up‑stream cost pressures high.
As a result, even a major refinery price cut doesn’t relieve the cost‑of‑living crisis.
🧩 What This Says About Us as a Nation
Some Nigerians react with frustration, even despair:
“No transport fare drop.”
“No food price relief.”
“No easing of pressure. Nothing.”**
This reaction reflects more than economic disappointment — it speaks to a deep societal expectation gap.
We live in a nation where:
People expect instant pass‑through of benefits.
Markets often fail to self‑correct downward.
Costs are sticky; prices only go up easily.
This isn’t unique to Nigeria, but the scale and severity feel uniquely harsh. Instead of national jubilation over cheaper fuel, there’s a resigned silence — a symptom of persistent economic strain and muted expectations.
📌 Final Thought: Are We Our Own Worst Enemy?
The Dangote price cut should have been a national win. Instead, it exposed something deeper:
Cheaper petrol did not automatically mean cheaper living.
Structural inefficiencies mean price relief rarely reaches ordinary Nigerians.
And at the heart of it all — a complex dance between policy, markets, and human psychology.
Yes, prices at refineries matter. Yes, competition is improving supply dynamics. But unless the benefits flow through the entire economic chain, Nigerians may continue to feel the pinch — even when prices at the source are falling.
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