Dangote Petroleum Refinery has temporarily suspended the sale of petroleum products in Naira, citing the need to align its sales proceeds with crude oil purchase obligations, which are denominated in U.S. dollars.
In a statement issued on Wednesday, the company explained that the decision was necessary due to an imbalance between its Naira-based sales and its dollar-denominated crude procurement.
“Dear valued customers, 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,” the statement read.
This move means petroleum marketers will now have to pay in dollars to purchase products like petrol and diesel from the refinery, potentially leading to an increase in pump prices across Nigeria.
Dangote Refinery clarified that it had already exceeded the value of Naira-denominated crude it received and would only resume sales in Naira once it receives more local crude from the Nigerian National Petroleum Corporation (NNPC).
The company also refuted online reports alleging ticketing fraud as the reason for the sales suspension, calling such claims “malicious falsehoods” and reaffirming its commitment to serving the Nigerian market.
Government’s Response
The Federal Executive Council (FEC) had previously directed that crude oil sales to local refineries be conducted in Naira, ensuring that refined products were sold within Nigeria in the local currency. However, Dangote Refinery’s decision now raises concerns about compliance with this policy.
Last week, the government reaffirmed that the policy framework for selling crude oil in Naira for domestic refining remains in place. Federal Inland Revenue Service (FIRS) Chairman, Zacch Adedeji, who also chairs the presidential subcommittee on Naira-for-crude sales, assured that ongoing discussions were addressing concerns between NNPC and Dangote Refinery.
For now, with transactions shifting to dollars, fuel prices in Nigeria may soon rise, impacting consumers and businesses nationwide.
