Nigerians could see higher prices for diesel and petrol because the Dangote Petroleum Refinery is temporarily stopping sales in Naira.
“This decision is necessary to avoid a mismatch between our sales proceeds and our crude oil purchase obligations, which are currently denominated in US dollars,” the company said in a statement on Wednesday.
The Lagos-based $20 billion refinery stated that the value of its product sales in Naira has surpassed the value of the Naira-denominated crude oil it received from the Nigerian National Petroleum Company Limited (NNPCL).
“As a result, we must temporarily adjust our sales currency to align with our crude procurement currency,” the company explained.
The Dangote refinery affirmed its dedication to the Nigerian market and pledged to resume selling products in Naira once it receives crude oil shipments from the NNPCL in the Nigerian currency.
“As soon as we receive an allocation of Naira-denominated crude cargoes from NNPC, we will promptly resume petroleum product sales in Naira,” it said.
Dangote Refinery’s announcement coincides with an ongoing price competition with NNPCL. In July 2024, the FEC mandated NNPCL to sell crude to domestic refineries, including Dangote, in Naira to reduce dollar dependency and stabilize fuel prices.
NNPCL stated that the six-month Naira crude sales agreement with Dangote Refinery, initiated in October 2024, was set to expire in March 2025, but negotiations for a new contract are underway.
They reported supplying over 48 million barrels of crude under this arrangement and over 84 million since Dangote’s operations began in 2023.
Nigeria, grappling with energy challenges due to non-functional state refineries, relies heavily on imported fuel, primarily through NNPCL.
Fuel shortages and price hikes, exacerbated by the removal of fuel subsidies in May 2023, have significantly impacted citizens.
Dangote Refinery, after overcoming regulatory hurdles, began operations in December 2024 with a 350,000 barrels/day capacity, aiming to reach 650,000 barrels/day by year’s end.
It has started supplying diesel, aviation fuel, and now petrol to the Nigerian market.
