The Dangote Petroleum Refinery has broken its silence on the recent petrol price surge, revealing that its abrupt return to naira-denominated sales was a strategic move to prevent a nationwide fuel shortage and further price increases. A senior management official, speaking anonymously due to lack of authorisation, told Punch that the decision was triggered by the observation that fuel importers were allegedly hoarding supplies while waiting for prices to climb higher.
Why Dangote Reverted to Naira Sales
According to the official, the refinery acted in the national interest. “We took the decision in the interest of the country to start selling Premium Motor Spirit in naira after noticing that importers were holding back their products while waiting for prices to rise,” the official stated. This reversal came shortly after the refinery had switched to dollar transactions, a move that had unsettled marketers and raised fears of supply disruptions.
The refinery set its gantry price at N1,215 per litre, with the coastal price fixed at N1,602,495 per metric tonne. This new pricing is expected to ease pressure on marketers who struggled to secure foreign exchange under the dollar regime.
Dollar Sales Triggered Industry Anxiety
Dangote’s earlier decision to sell petrol in U.S. dollars had sparked widespread concern among fuel marketers. Many suspended loading because they could not obtain the necessary forex. The refinery had defended that move, explaining that it had to source additional crude oil from international markets in dollars after receiving insufficient supplies under the Federal Government’s naira-for-crude arrangement. The latest shift back to naira sales is anticipated to improve product availability and stabilise the downstream sector.
Ongoing Talks with the Federal Government
The refinery confirmed that discussions with the Federal Government over crude supply arrangements continue. While expressing optimism about reaching a mutually beneficial agreement, the official hinted at unresolved issues. He alleged that some government stakeholders still prefer exporting Nigeria’s crude oil and importing refined products, a practice that undermines local refining capacity.
Depot Prices Begin to Fall
The return to naira sales has already reshaped the fuel market. Last week, depot owners had hiked gantry prices to as high as N1,275 per litre after Dangote temporarily halted loading. However, following the refinery’s announcement of its new N1,215 per litre gantry price, several depots adjusted their rates downward to remain competitive. Industry data now shows depot prices ranging between N1,215 and N1,220 per litre. Retail pump prices are currently selling between N1,260 and N1,300 per litre, depending on location.
Global Oil Market Adds Fresh Pressure
The latest petrol price increase also reflects developments in the international oil market. Escalating tensions in the Middle East and attacks on commercial vessels in the Red Sea recently pushed global crude prices above $100 per barrel before settling at around $96 per barrel. While stronger crude prices could boost Nigeria’s oil export earnings and government revenue, analysts warn they may also increase the cost of refined petroleum products, fuel inflation, and place additional financial pressure on consumers if domestic supply remains constrained.
With negotiations over crude supply still ongoing and global oil prices remaining volatile, industry watchers say the direction of petrol prices in Nigeria will largely depend on the stability of local refining operations and future government policy.
Market Impact and Consumer Concerns
The recent resumption of petrol and diesel loading by fuel marketers at private depots was linked to a week of disruptions caused by price adjustments. As the Dangote refinery’s dollar-pricing policy created market uncertainty, prices surged, sparking concerns about the impact on consumers and the broader economy. The return to naira sales is seen as a temporary relief, but the long-term outlook remains tied to crude supply agreements and global oil trends.
