The Dangote Petroleum Refinery has temporarily halted the sale of petroleum products in naira, following failed negotiations between the $20 billion Lekki-based refinery and the Nigerian National Petroleum Company Limited (NNPCL) on a naira-for-crude agreement.
Following the announcement on Wednesday, the cost of loading petrol at private depots in Lagos surged to ₦900 per litre, up from less than ₦850 per litre before the suspension.
Industry experts and oil marketers have warned that this move could place further pressure on Nigeria’s foreign exchange market, as fuel importers and dealers will now need to source large amounts of U.S. dollars to purchase petroleum products.
Sources familiar with the negotiations attributed the failure of the naira-for-crude talks to the NNPCL’s extensive forward sales of crude oil.
The national oil company has reportedly used large portions of its yet-to-be-produced crude as collateral for international loans, limiting its ability to supply domestic refineries with crude oil.
Despite concerns over rising fuel prices, the Dangote Group has assured that the suspension of naira sales is temporary.
In a statement, the company explained:
“Dear valued customers, we wish to inform you that the 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 suspension underscores the currency challenges affecting Nigeria’s oil sector and could further destabilize fuel prices, potentially impacting businesses and consumers nationwide.
