Dangote Refinery explains why it switched back to naira petrol sales

The Dangote Petroleum Refinery has revealed that it returned to selling petrol in naira to prevent a nationwide fuel shortage and stop prices from rising even further. A senior official said the company noticed that fuel importers were holding back their products while waiting for prices to increase.

Under the revised pricing, the refinery set its gantry price at N1,215 per litre. Pump prices across Nigeria now range between N1,260 and N1,300 per litre following renewed tensions in the global oil market.

Reason for the reversal

A senior management official of the refinery, who spoke on condition of anonymity, said the decision was driven by market realities and not by any improvement in crude oil supply. “We took the decision in the interest of the country to start selling Premium Motor Spirit in naira after noticing that importers were holding back their products while waiting for prices to rise,” the official said.

The refinery had briefly switched to dollar-denominated sales, a move that unsettled marketers and raised fears of fresh disruptions in Nigeria’s downstream petroleum sector. Many fuel marketers suspended product loading because they struggled to obtain the foreign exchange required for purchases. At the time, the refinery defended the dollar pricing, explaining that it had been forced to source additional crude oil from the international market in dollars after receiving insufficient supplies under the Federal Government’s naira-for-crude arrangement.

Market impact and depot response

The return to naira sales has already reshaped the fuel market. Last week, depot owners increased petrol gantry prices to as much as N1,275 per litre after Dangote temporarily halted loading activities. But after the refinery announced its new N1,215 per litre gantry price, several depots adjusted their rates downward to stay competitive. Industry data now shows depot prices ranging between N1,215 and N1,220 per litre.

The refinery also set its coastal price at N1,602,495 per metric tonne. Discussions with the Federal Government over crude supply arrangements are continuing. The company expressed optimism that a mutually beneficial agreement would eventually be reached, although the official hinted that unresolved issues remain. He further alleged that some stakeholders within government still favour exporting Nigeria’s crude oil while importing refined petroleum products, a practice the refinery believes undermines local refining capacity.

What this means for the naira and consumers

The latest increase in petrol prices also reflects developments in the international oil market. Escalating tensions in the Middle East and attacks on commercial vessels in the Red Sea recently pushed global crude prices above $100 per barrel before settling at around $96 per barrel. While stronger crude prices could boost Nigeria’s oil export earnings and government revenue, analysts warn they may also increase the cost of refined petroleum products, fuel inflation, and place additional financial pressure on consumers if domestic supply remains constrained.

With negotiations over crude supply still ongoing and global oil prices remaining volatile, industry watchers say the direction of petrol prices in Nigeria will largely depend on the stability of local refining operations and future government policy.