The Dangote Petroleum Refinery in Lagos has announced a temporary halt to the sale of petroleum products in Naira. This move is likely to impact fuel prices in Nigeria. The refinery noted that the decision was necessary to align its sales currency with its crude oil purchase obligations, which are denominated in US dollars. This change follows the imbalance between sales in Naira and Naira-denominated crude received from the Nigerian National Petroleum Company Limited (NNPCL).
Earlier efforts by the Federal Executive Council to stabilize prices involved directives for the NNPCL to sell crude to local refineries, including Dangote, in Naira. However, the current agreement with Dangote Refinery, structured for six months, expired in March 2025, with talks reportedly ongoing for a new contract. During the agreement, over 48 million barrels of crude oil were provided to the refinery in Naira terms.
The halt in sales comes amid ongoing price tensions between Dangote and the NNPCL, coupled with Nigeria’s broader energy challenges. The refinery, which recently started operations and aims to reach a capacity of 650,000 barrels per day, is pivotal in reducing the country’s reliance on imported refined petroleum products. Fuel prices have significantly increased since the subsidy removal in 2023, and any disruption or changes in current agreements could further strain the situation for Nigerian consumers, who are already dealing with high energy costs and unreliable electricity supply.
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