Nigerians could face an increase in the prices of diesel and petrol as the Dangote Petroleum Refinery temporarily discontinues 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 US dollars,” the company stated on Wednesday.
The $20 billion refinery, located in Lagos, explained that its sales in Naira had surpassed the amount of Naira-denominated crude received from the Nigerian National Petroleum Company Limited (NNPCL).
“As a result, we must temporarily adjust our sales currency to align with our crude procurement currency,” the company added.
Despite this change, the refinery assured that it remains committed to the Nigerian market and will resume local sales in Naira once it receives crude supplies in the local currency.
“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 emphasized.
The announcement comes amid ongoing pricing disputes between Dangote Refinery and the NNPCL.
To ease the pressure on the US dollar and stabilize petroleum prices, the Federal Executive Council (FEC) had directed in July 2024 that crude oil should be sold to Dangote Refinery and other local refiners in Naira rather than in dollars.
At the beginning of March 2025, the NNPCL clarified that its Naira-based crude sales agreement with Dangote Refinery was initially structured to last for six months, with the contract expiring in March 2025.
The state-owned firm stated that negotiations were ongoing to renew the contract and confirmed that since October 2024, over 48 million barrels of crude oil had been supplied to Dangote Refinery under the Naira-denominated arrangement.
Since the refinery commenced operations in 2023, the NNPCL has reportedly supplied over 84 million barrels of crude to the facility.
Nigeria, Africa’s most populous nation, has long struggled with energy challenges. Until 2024, all its state-owned refineries remained non-operational for decades, leaving the country reliant on imported petroleum products. The NNPCL served as the primary importer of these essential commodities.
Fuel shortages have been a common occurrence, and since President Bola Tinubu removed fuel subsidies in May 2023, petrol prices have surged from around ₦200 per litre to approximately ₦1,000 per litre, worsening the economic strain on citizens who depend on petrol for transportation and electricity generation.
The Dangote Refinery, spearheaded by billionaire industrialist Aliko Dangote, began operations in December 2024 with an initial processing capacity of 350,000 barrels per day. Despite initial regulatory hurdles, the refinery aims to reach full capacity of 650,000 barrels per day by the end of 2025. It has already started supplying diesel, aviation fuel, and petrol to local marketers.
