Perhaps for the first day in African history, prices paid at the pump are then indicative of the economics of supply and demand © BloombergHello and delightful to Energy Source, coming to you from Houston, where business leaders are meeting at CERAWeek, the largest energy meeting in the US. The FT energy team hit the ground running with an exclusive interview with the new US energy secretary Chris Wright, who insisted President Donald Trump’s “drill, baby, drill” agenda would not be derailed even if oil hit$ 50 a barrel. The vote of Trump was celebrated by the market according to his vote promises to reduce some of the regulatory burdens imposed by a weather- focused Joe Biden. But at a private appointment, professionals implored Wright to ensure the White House took a steadier approach to governance after several months of backflips on problems such as taxes. Chevron manager Mike Wirth after delivered this information in people from the meeting stage:” Swinging from one extreme to another is not the correct policy”. Chevron may know. Last month Trump cancelled the company’s licensing to work in Venezuela, putting at hazard its century-long appearance in the country. Thanks for reading, Jamie What’s fuelling Nigeria’s diesel value war? How much is a gallon of petrol price in Nigeria? It’s a topic I asked on the websites of Energy Source in October shortly after billionaire businessman Aliko Dangote’s 650, 000-barrel-a-day factory began producing the energy. Dangote’s plant has since gone on to kindle a price war in Nigeria’s river fuel economy, sparking fierce competition among fuel advertisers selling to price-sensitive final consumers. The Dangote refinery has cut the price at which it sells to petrol distributors twice this year in the span of roughly five weeks, from a peak of N950/litre ($ 0.63 ) at the beginning of February to N825/litre ($ 0.55 ) in early March. These reductions have forced state-owned oil company NNPC, also the country’s largest petrol supplier, to respond with its own price reductions to stay competitive. At petrol stations surveyed by Energy Source in the Ikoyi and Victoria Island districts of Lagos, fuel now retails for N860/litre ($ 0.57 ) at a Dangote partner station, N865 ($ 0.57 ) at another and N860 ($ 0.57 ) at NNPC’s retail outlets. Perhaps for the first time in Nigerian history, prices paid at the pump are reflective of the economics of supply and demand. A free-market approach that was once unthinkable just two years ago has taken root. Several factors have played a role in the competitive pricing happening in Nigeria, according to Samuel Aladegbaye, an energy analyst at Lagos-based financial services group Zedcrest. Global oil prices have steadily dropped since the start of 2025, with an expected glut in Opec+ supplies sending Brent crude prices tumbling to as low as$ 68.33 last week, the lowest level in more than three years. Taking into account global oil prices and exchange rates of the dollar to naira, the cost of producing a litre of petrol in Nigeria would be about N740, Aladegbaye estimated, a healthy margin for domestic producers given how much they sell to distributors and what final consumers are currently paying. ” These prices are economically viable for these businesses, but with a competitor]Dangote ] in the market, other companies cannot make abnormal profits because there’s another significant party in the market. It’s a pricing war. . . tied to the price of the commodity also dropping”, Aladegbaye said. In other words, what the Dangote refinery has done to the downstream oil sector in Nigeria is introduce an element of competition in an industry that was previously subject to the whims of a cartel of importers and distributors who had the final say, or close to it, on what petrol should cost. In an era where the government of President Bola Tinubu has removed generous but costly fuel subsidies, industry players now have to compete on their own merits, with the shield of government largesse removed. For decades, Africa’s largest oil producer absorbed the true cost of petrol, paying out billions of dollars to importers who then sold it to consumers at government-approved prices. Nigerians enjoyed some of the world’s cheapest petrol. But in a country with low revenues, it was almost impossible to keep the bonanza going — a system that many successive governments had flagged for being rife with fraud in the first place. Yet the economic case for Dangote’s price war tells only half the story. The Dangote Group has also twice reduced prices arbitrarily since it started producing petrol, first at Christmas, and in its most recent cut. The company’s own statement admits the latter reduction was” strategic” and” to provide essential relief to Nigerians in anticipation of the upcoming Ramadan season]the Muslim holy month], while also supporting President Bola Ahmed Tinubu’s economic recovery policy by alleviating the financial burden on the Nigerian populace”. It’s noteworthy that a company that made the economic argument for cutting fuel prices in early February has also made the tacit admission that it is capable of lowering them when it suits its overarching aims. The Dangote Group declined to comment. Could Nigeria be swapping one era of monopoly for another? It’s an allegation that Dangote has strenuously denied in the past, including last year after it was made by the head of Nigeria’s downstream industry regulator. But Dangote’s critics often point to his stranglehold on the country’s cement industry where he controls more than 60 per cent of the market. ” Yes, there’s latitude for them to reduce prices and some of his competitors who import are going to be undercut”, said Cheta Nwanze, partner at the Lagos-based SBM Intelligence company. ” But there’s no company on earth that is populist for no reason”, he said of Dangote’s “relief” pricing. ” There’s always a motive in what they do. Are we going to see him raise prices when he has conquered the market? We saw it with cement and sugar]where he dominates]. Remember, Nigeria has one of the highest cement prices in the world. In the long run, for there to be competition, the NNPC would have to get used to competing with Dangote in terms of refining locally”. ( Aanu Adeoye ) Power PointsOntario has hit power exports to the US with a 25 per cent surcharge as the US-Canada trade war escalates. Electric vehicle giant Tesla has crashed back to reality: here is the story in several charts. US energy secretary Chris Wright has criticised climate policy for damaging the UK economy. Energy Source is written and edited by Jamie Smyth, Myles McCormick, Amanda Chu, Tom Wilson and Malcolm Moore, with support from the FT’s global team of reporters. Reach us at energy. [email protected] and follow us on X at @FTEnergy. Catch up on past editions of the newsletter here.
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