The Independent Petroleum Marketers Association of Nigeria (IPMAN) has warned that petrol prices could increase if the Dangote Petroleum Refinery begins selling refined products in U.S. dollars instead of naira. The association stated that marketers would need to purchase dollars to buy fuel, raising operational costs that would likely be transferred to consumers.
IPMAN Raises Alarm Over Dollar Transactions
IPMAN's National Public Relations Officer, Chinedu Ukadike, said in an interview that while the association had not received official notification from the refinery, such a move would not be surprising given the financial pressures on the facility. He explained that switching to dollar sales would force marketers to source foreign exchange, increasing costs that would ultimately reflect at the pump.
“If the refinery eventually returns to dollar sales, it will certainly have implications for the downstream market. Marketers will have to source dollars to buy products, and those costs will ultimately reflect at the pump,” Ukadike stated.
The warning follows reports that the 650,000-barrel-per-day refinery is considering a return to dollar-denominated transactions due to rising foreign-exchange obligations and concerns about crude oil supply.
Potential Impact on Consumers
Ukadike noted that any additional cost incurred by marketers in accessing dollars would likely be passed on to motorists, potentially ending the relative stability in petrol prices seen in recent months. He added that downstream sector players are closely monitoring the situation because changes in the refinery's cost structure have direct implications for fuel pricing across Nigeria.
Crude Supply Challenges and Global Factors
The concerns come months after the Dangote Refinery temporarily suspended naira sales on March 19, 2025, to prevent a mismatch between its naira sales proceeds and crude oil purchase obligations, which are largely dollar-denominated. Industry stakeholders say the refinery's foreign exchange requirements have increased due to insufficient crude supply under the federal government's naira-for-crude arrangement, heightened geopolitical tensions in the Middle East (especially around the Strait of Hormuz), and the resumption of fuel imports by marketers. Global crude oil prices remain volatile amid renewed tensions involving Iran, adding further uncertainty for refiners.
Call for Stable Crude Supply
Ukadike stressed that the issue extends beyond Dangote Refinery, highlighting wider structural challenges in Nigeria's downstream petroleum industry, particularly crude oil availability for domestic refining. He warned that unless crude supply to local refineries improves and foreign exchange pressures ease, refiners may continue facing operational difficulties that could lead to higher fuel prices.
Meanwhile, Dangote Refinery has resumed its free petrol delivery programme, aiming to reduce fuel supply costs across Nigeria. The initiative eliminates transportation fees for qualified marketers and introduces a structured credit facility that may reshape the fuel distribution landscape.
