Dangote Refinery Key to Reducing Inflation – FDC Report

The Dangote Petroleum Refinery has been identified as a critical force in curbing Nigeria’s rising inflation and transforming the country’s downstream oil sector, according to a new report by Financial Derivatives Company (FDC) Limited.

The think tank, led by economist Bismarck Rewane, made this known in its July edition of the Lagos Business School Executive Breakfast Presentation.

The report emphasised that Dangote Refinery is already playing a significant role in stabilising petrol prices and reducing transport fares nationwide.

FDC noted that Dangote’s uniform pricing policy and credit facilities to fuel marketers represent a “game changer” for the industry, with the potential to cut logistics costs significantly and attract more private sector investment.

A key highlight of the refinery’s strategy is its deployment of 4,000 Compressed Natural Gas (CNG) trucks to deliver refined petroleum products directly to consumers. According to FDC, this move will lower pump prices, ease the cost of transportation, and support over 42 million Micro, Small and Medium Enterprises (MSMEs) across the country.

The report also examined Nigeria’s current economic paradox, especially in relation to global oil prices. It highlighted the disconnect between government revenues and the welfare of citizens, noting that while high oil prices benefit the government and strengthen the naira, they do not always translate into gains for the average Nigerian.

Conversely, falling oil prices often result in consumer relief at the pump, but negatively affect government finances.

On the international front, FDC observed a shift in global market sentiment—from fears of volatility to the optimism of speculative traders—suggesting that market participants are now capitalising on uncertainty rather than being constrained by it.

The think tank concluded that with strategic initiatives like the Dangote Refinery’s logistics overhaul, Nigeria is poised to make meaningful progress in tackling inflation, improving energy access, and supporting small businesses.