Nigerians could see a rise in the prices of diesel and petrol as Dangote Petroleum Refinery announced a temporary halt in the sales of petrol and other products in Naira. The $20 billion refinery, located in Lagos, said this move was necessary due to its crude oil purchase obligations, which are denominated in US dollars.
In a statement released on Wednesday, March 19, 2025, Dangote Refinery explained that its sales of petroleum products in Naira had exceeded the value of Naira-denominated crude received from the Nigerian National Petroleum Company Limited (NNPCL).
“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.
The refinery assured Nigerians that it remained committed to serving the local market and would resume sales in Naira as soon as it received Naira-denominated crude cargoes from the NNPCL.
“As soon as we receive an allocation of Naira-denominated crude cargoes from NNPC, we will promptly resume petroleum product sales in Naira,” Dangote Refinery added.
Naira Crude Sales Agreement Expired in March
The Federal Executive Council (FEC) had, in July 2024, directed the NNPCL to sell crude oil to Dangote Refinery and other local refineries in Naira rather than in US dollars to reduce forex demand and ensure price stability.
However, in March 2025, the Naira-denominated crude sales agreement expired, and NNPCL has yet to finalize a renewal. Since October 2024, the state-owned oil company said it had supplied 48 million barrels of crude oil to Dangote under the Naira arrangement and 84 million barrels since the refinery commenced operations in 2023.
The announcement comes at a time when fuel prices have skyrocketed following the removal of fuel subsidy in May 2023 by President Bola Tinubu. The price of petrol jumped from around ₦200/litre to ₦1,000/litre, worsening economic hardship.
With state-owned refineries only recently coming back online after decades of inactivity, Nigeria still depends heavily on imported refined petroleum products, with the NNPCL as the major importer.
The Dangote Refinery, which began supplying diesel, aviation fuel, and petrol in recent months, aims to ramp up production to 650,000 barrels per day by the end of 2025. However, this latest policy shift raises concerns over fuel availability and affordability for millions of Nigerians.
9am News Nigeria will continue to monitor developments as discussions between Dangote Refinery and NNPCL progress.
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