Dangote Petroleum Refinery has temporarily suspended the sale of petroleum products in Naira, citing a misalignment between its revenue streams and crude oil purchase obligations, which are denominated in U.S. dollars.
In a statement released on March 19, 2025, the company explained that its sales in Naira had exceeded the value of Naira-priced crude oil received, necessitating an adjustment in its pricing structure.
“We wish to inform you that Dangote Petroleum Refinery has temporarily halted the sale of petroleum products 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 U.S. dollars. To date, our sales of petroleum products in Naira have exceeded the value of Naira-denominated crude we have received,” the company stated.
Dangote Refinery also dismissed reports circulating online that it had ceased loading operations due to ticketing fraud, calling such claims “malicious falsehoods.” The company affirmed that its systems remain robust and have not experienced any fraud-related incidents.
The refinery reassured the public that as soon as it receives an allocation of Naira-denominated crude cargoes from the Nigerian National Petroleum Company Limited (NNPCL), it will promptly resume selling petroleum products in Naira.
Background and Market Implications
The federal government had initially agreed to a Naira-for-crude arrangement with local refineries. However, NNPCL recently clarified that this arrangement had ended and confirmed that it had supplied Dangote Refinery with 84 million barrels of crude oil since its operations began.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has raised concerns over the ongoing price battle between NNPCL and Dangote Refinery, stating that fluctuating fuel prices are adversely affecting its members.
Due to the ongoing competition, the cost of Premium Motor Spirit (PMS) for consumers has dropped, with prices currently ranging between N865 and N950 per liter in Awka. Dangote Refinery has also reduced its ex-depot price of petrol from N890 to N825 per liter, effective February 27, 2025.
Market Outlook:
- Independent marketers may face challenges in directly lifting petroleum products from Dangote Refinery, as they may have to rely on larger industry players.
- Consumers and marketers may experience short-term uncertainty due to the temporary suspension of Naira sales and ongoing price fluctuations.
- The refinery’s decision to align its sales currency with its crude oil purchase obligations aims to ensure financial stability and long-term sustainability.
- This shift could influence oil pricing dynamics in Nigeria’s domestic market.
Source: Nairametrics
