Nigerians may face another hike in the prices of diesel and petrol as the Dangote Petroleum Refinery has temporarily stopped selling petroleum products in Naira.
In a statement released on Wednesday, the $20 billion refinery explained that the decision was necessary to address a disparity between its sales revenue and crude oil purchase obligations, which are currently denominated in US dollars.
“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 stated.
The refinery, located in Lagos, clarified that it had exceeded the value of Naira-denominated crude it received from the Nigerian National Petroleum Company Limited (NNPCL) through previous transactions.
“As a result, we must temporarily adjust our sales currency to align with our crude procurement currency,” the statement added.
However, the company assured Nigerians that the suspension would only last until it received more crude oil from the NNPCL in Naira.
“As soon as we receive an allocation of Naira-denominated crude cargoes from NNPC, we will promptly resume petroleum product sales in Naira,” the refinery said.
The decision comes amid an ongoing price dispute between Dangote Refinery and the NNPCL.
To stabilize fuel prices and reduce demand for the US dollar, the Federal Executive Council (FEC) had, in July 2024, directed the NNPCL to sell crude oil to Dangote Refinery and other domestic refineries in Naira rather than in foreign currency.
At the start of March 2025, the NNPCL disclosed that its Naira-denominated crude supply agreement with Dangote Refinery had been structured with a March 2025 expiration date.
However, the state oil firm assured the public that discussions were underway to extend the agreement.
Since October 2024, the NNPCL has supplied Dangote Refinery with over 48 million barrels of crude oil under the Naira-denominated deal.
In total, the company said it had delivered more than 84 million barrels of crude to the private refinery since it commenced operations in 2023.
Nigeria, Africa’s largest economy, has long struggled with energy security due to the prolonged inactivity of its state-owned refineries, which only began revival efforts in 2024.
As a result, the country has relied heavily on imported refined petroleum products, with the NNPCL acting as the primary importer.
Fuel shortages have been a persistent issue, leading to long queues at filling stations nationwide.
Since President Bola Tinubu removed fuel subsidies in May 2023, petrol prices have surged from about ₦200 per litre to nearly ₦1,000 per litre, worsening the economic hardships faced by many Nigerians.
In December 2024, Dangote Refinery commenced operations with an initial production capacity of 350,000 barrels per day. The facility, which had earlier faced regulatory hurdles, aims to reach its full capacity of 650,000 barrels per day before the end of 2025.
It has already begun supplying diesel and aviation fuel to Nigerian marketers and recently expanded into petrol distribution.
