Nigeria’s Dangote refinery suspends fuel sales in local currency
Company says move is to counter a mismatch between sales in naira and purchases of crude in dollars
19 March 2025 - 19:18
byIsaac Anyaogu
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Workers at the Dangote Petroleum Refinery in Lagos, Nigeria, July 20 2024. Picture: REUTERS/MARVELLOUS DUROWAIYE
Lagos — Nigeria’s Dangote Petroleum Refinery announced on Wednesday it was temporarily suspending fuel sales in naira to avoid a mismatch between sales in the local currency and purchases of crude in dollars.
The decision by the refinery, which produces 650,000 barrels of oil a day, to sell its fuel in dollars could lead to a rise in petrol prices and a weakening naira as local fuel traders scramble for dollars.
The plant on the outskirts of Lagos is Nigeria’s main refinery but has struggled to secure sufficient volumes under an arrangement by the Nigerian government to sell it crude in naira.
“To date, our sales of petroleum products in naira has exceeded the value of naira-denominated crude we have received. As a result, we must temporarily adjust our sales currency to align with our crude procurement currency” the company said in a statement.
It did not say how long the temporary suspension might last.
Last year, Nigeria agreed that the state-owned Nigerian National Petroleum Company (NNPC) could sell crude to local refineries including Dangote in naira for an initial period of six months from October, to ease supply constraints.
However, the Dangote refinery has said it was not getting agreed volumes while other refineries said they were not getting any at all.
The NNPC said last week it was in talks with the Dangote refinery to renew the deal, though it is unclear if it will be extended. It did not immediately respond to a request for comment.
In a bid to end petrol imports, Dangote has cut its petrol price by more than 20% since December. It has also gone to court to halt petrol imports.
The Dangote refinery was built by Aliko Dangote, Africa’s richest person. Analysts and government officials have touted it as having the potential to secure energy independence for Nigeria.
The country is Africa’s biggest oil producer and exporter, but has long been forced to import refined products.
Nigeria’s President Bola Tinubu ended the country’s fuel subsidy two years ago, leading to a rise in prices.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Nigeria’s Dangote refinery suspends fuel sales in local currency
Company says move is to counter a mismatch between sales in naira and purchases of crude in dollars
Lagos — Nigeria’s Dangote Petroleum Refinery announced on Wednesday it was temporarily suspending fuel sales in naira to avoid a mismatch between sales in the local currency and purchases of crude in dollars.
The decision by the refinery, which produces 650,000 barrels of oil a day, to sell its fuel in dollars could lead to a rise in petrol prices and a weakening naira as local fuel traders scramble for dollars.
The plant on the outskirts of Lagos is Nigeria’s main refinery but has struggled to secure sufficient volumes under an arrangement by the Nigerian government to sell it crude in naira.
“To date, our sales of petroleum products in naira has exceeded the value of naira-denominated crude we have received. As a result, we must temporarily adjust our sales currency to align with our crude procurement currency” the company said in a statement.
It did not say how long the temporary suspension might last.
Last year, Nigeria agreed that the state-owned Nigerian National Petroleum Company (NNPC) could sell crude to local refineries including Dangote in naira for an initial period of six months from October, to ease supply constraints.
However, the Dangote refinery has said it was not getting agreed volumes while other refineries said they were not getting any at all.
The NNPC said last week it was in talks with the Dangote refinery to renew the deal, though it is unclear if it will be extended. It did not immediately respond to a request for comment.
In a bid to end petrol imports, Dangote has cut its petrol price by more than 20% since December. It has also gone to court to halt petrol imports.
The Dangote refinery was built by Aliko Dangote, Africa’s richest person. Analysts and government officials have touted it as having the potential to secure energy independence for Nigeria.
The country is Africa’s biggest oil producer and exporter, but has long been forced to import refined products.
Nigeria’s President Bola Tinubu ended the country’s fuel subsidy two years ago, leading to a rise in prices.
Reuters
Nigeria’s state oil firm raises petrol prices again
Nigeria’s Dangote refinery begins processing petrol
Nigeria probes fuel imports after Dangote rift with regulator
Nigeria’s Dangote owes $2.7bn for refinery construction
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.