The Dangote Petroleum Refinery has announced a temporary suspension of petroleum product sales in naira, citing concerns over financial misalignment between its crude oil purchase obligations, which are dollar-denominated, and its local sales revenue.
In a statement, the refinery’s management explained that it had exceeded the value of naira-denominated crude received, necessitating an adjustment to align sales with procurement costs. The company assured that sales in naira would resume once it receives crude allocations in the local currency from the Nigerian National Petroleum Company Limited (NNPCL).
The development has raised fears of potential disruptions in the petroleum market, particularly regarding pricing stability.
Stakeholders warn that the refinery’s decision could trigger price volatility and impact macroeconomic stability. The Independent Petroleum Marketers Association of Nigeria (IPMAN) expressed concerns that its members might be forced to follow suit by selling petroleum products in dollars if the situation persists.
Dr. Muda Yusuf, Chief Executive of the Center for the Promotion of Private Enterprise (CPPE), described the decision as a “disturbing development” that could significantly alter domestic fuel pricing and increase pressure on the foreign exchange market.
“This could lead to exchange rate depreciation, strain foreign reserves, and undermine investor confidence,” Yusuf cautioned.
IPMAN’s National President, Abubakar Maigandi, echoed these concerns, noting that the inability to load petrol from Dangote Refinery in the past two days has already driven up depot prices.
“As of yesterday, depot owners in Lagos sold petrol at ₦835 per litre, compared to ₦815 per litre before Dangote halted naira sales,” Maigandi revealed.
National Public Relations Officer of IPMAN, Chinedu Ukadike, warned that if the refinery implements the shift fully, it could drive up the demand for dollars, leading to inflation and economic instability.
In response, Chairman of the Technical Sub-Committee on Domestic Sales of Crude Oil and Refined Products, Zacch Adedeji, reaffirmed that the government’s naira-for-crude policy remains in place. He emphasized that local refineries are not excluded from domestic crude supply and that the initiative aims to enhance local refining capacity while reducing foreign exchange exposure.
“There has been no decision at the policy level to discontinue this approach. The framework remains intact to ensure supply stability and competitive pricing,” Adedeji stated.
Despite the government’s assurances, industry players are urging authorities to ensure continued crude supply to Dangote Refinery in naira to prevent undue strain on the economy.
As the situation unfolds, market analysts predict further volatility in fuel pricing and exchange rates, underscoring the need for urgent policy interventions to maintain stability in Nigeria’s energy sector.
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