The Dangote refinery, Africa's largest refining facility, has announced a temporary suspension of its sales of petroleum products in naira, a decision that is fuelling concerns about a possible rise in fuel prices and the stability of the local market. In a statement, management justified the measure by the need to avoid financial imbalances, linked to the disparity between its purchases of crude oil in dollars and its sales in local currency.
"Our sales in naira have exceeded the value of the naira-denominated crude we receive. We need to temporarily adjust our sales currency to align with the currency of our crude supply", the refinery explained. This suspension will last until the Nigerian National Petroleum Company Limited (NNPCL) provides new crude oil allocations in naira, in accordance with the "naira for crude" policy.
This decision immediately provoked alarmist reactions. Dr Muda Yusuf, Director General of the Centre for the Promotion of Private Enterprise (CPPE), warned that the measure could reverse the recent decline in fuel prices, which have fallen by 13.16% since January 2025. "This will change the dynamics of domestic prices and increase pressure on foreign currencies", he said, pointing to a risk of market destabilisation.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) shares these concerns. Abubakar Maigandi, national chairman of IPMAN, reported that prices at the depot in Lagos had risen from 815 to 835 naira per litre, due to difficulties in loading petrol at the Dangote refinery. "If the situation persists, we may be forced to sell in dollars", he warned. Chinedu Ukadike, IPMAN's public relations officer, called on the government to maintain crude sales in naira to avoid further pressure on the exchange rate.
In the face of these tensions, Zacch Adedeji, chairman of the technical sub-committee on domestic sales of crude oil and refined products in naira, was keen to reassure. "The 'naira for crude' policy remains in force. Local refineries still have access to domestic crude under structured agreements", he said, stressing the benefits of this initiative for price competitiveness and market efficiency.
The federal government has pledged to guarantee a stable supply of crude for the country's refineries, while closely monitoring the impact of this suspension on the market. While the Dangote refinery plays a key role in reducing dependence on imports, with production set to reach 500,000 barrels per day in January 2025, this decision highlights the challenges of making the transition to energy self-sufficiency in a context of currency volatility.
The resumption of sales in naira will be crucial to prevent prices from soaring and to maintain the confidence of consumers and market players in a sector that is vital to the Nigerian economy.