- Dangote Refinery Suspends Naira Sales: Dangote Refinery has suspended the sale of petroleum products in Naira to the domestic market .
- Mismatch in Sales Proceeds and Crude Oil Purchase: The refinery cited a mismatch between sales proceeds and crude oil purchase obligations denominated in US dollars .
- Potential Increase in Petrol Pump Prices: The decision may lead to an increase in petrol pump prices due to the cost of sourcing foreign exchange .
- Crude-for-Naira Agreement Ended: The crude-for-Naira agreement between NNPC Limited and Dangote Refinery ended on March 1, 2025 .
- NNPC Limited Clarifies Contract: NNPC Limited clarified that the contract was a six-month agreement, subject to availability, and expired at the end of March 2025 .
- Discussions Ongoing for New Contract: Discussions are currently ongoing towards emplacing a new contract .
Dangote Refinery’s decision to suspend the sale of petroleum products in Naira to the domestic market has sparked concerns about the potential impact on petrol pump prices. The refinery cited a mismatch between sales proceeds and crude oil purchase obligations denominated in US dollars as the reason for the suspension.
The implication of this decision is that petroleum products will now be sold in US dollars, which will increase the cost of sourcing foreign exchange for marketers. This increased cost will likely be passed on to consumers, leading to higher petrol pump prices.
The development has raised worries among stakeholders, including marketers and consumers, who are already grappling with the challenges of sourcing foreign exchange. The Nigerian National Petroleum Company (NNPC) Limited has clarified that the crude-for-Naira agreement with Dangote Refinery ended on March 1, 2025, and discussions are ongoing for a new contract.
Industry experts predict that the suspension of Naira sales by Dangote Refinery will exacerbate the existing foreign exchange challenges in the country, leading to higher prices of petroleum products. Marketers may also resort to selling petroleum products in US dollars, further complicating the situation.
The situation highlights the need for urgent intervention by the government to address the foreign exchange challenges and ensure a stable supply of petroleum products to the domestic market.
