Nigerians could soon face higher fuel prices after the Dangote Petroleum Refinery suspended the sale of petroleum products in naira.
The refinery, worth $20 billion and located in Lekki, Lagos, announced the halt due to a mismatch between its sales proceeds and crude oil purchase obligations, which are currently priced in US dollars.
Following this move, fuel loading prices at private depots in Lagos surged from ₦850 per litre to ₦900 per litre, with experts warning of further increases. The development raises concerns about pressure on the naira, as oil marketers will now need to source foreign currency to purchase fuel, potentially weakening the exchange rate.
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The decision comes amid stalled negotiations between the refinery and the Nigerian National Petroleum Company Limited (NNPCL) over the naira-for-crude deal. Industry insiders suggest that NNPCL’s forward sales of crude oil to secure international loans have left it with limited supplies for domestic refiners.
Market Impact and Industry Reactions
Oil marketers say the halt in naira transactions could cause petrol prices to spike further. The National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Hammed Fashola, warned that if fuel purchases depend entirely on the dollar, the naira will weaken, leading to inflationary pressures across the economy.
Private depots have already reacted by increasing fuel prices. Data shows that:
Chipet Depot raised its price from ₦835 to ₦900 per litre
Rainoil Depot increased from ₦830 to ₦835 per litre
Wosbab, Pinnacle, and MRS Tincan also adjusted their prices upward.
Experts predict that if the deadlock continues, fuel pump prices could reach ₦1,000 per litre within days.
Government and Industry Stakeholders Respond
NNPCL has yet to confirm whether the naira-for-crude agreement with Dangote is officially scrapped.
Spokesperson Olufemi Soneye stated that the company remains committed to supplying crude oil for local refining based on mutually agreed terms. However, sources say ongoing discussions between the refinery and the Technical Sub-Committee have collapsed due to a lack of available crude.
Dangote Group, in its official statement, assured Nigerians that the suspension of naira sales is temporary and will resume once the refinery receives an allocation of naira-denominated crude cargoes from NNPC. It also denied reports of fraud or ticketing issues, calling them “malicious falsehoods.”
Meanwhile, depot owners and industry players are calling on President Bola Tinubu to intervene and ensure local refiners receive a steady supply of crude oil. They argue that abandoning the naira-for-crude arrangement could push Nigeria back into full-scale fuel importation, reversing the recent gains in local refining.
