Dangote Refinery to Start Selling Fuel in U.S. Dollars. The Dangote Petroleum Refinery has announced that it will begin selling its refined petroleum products to marketers in U.S. dollars instead of naira, marking a major change in Nigeria’s downstream oil market.
The company said the decision was necessary because it buys most of its crude oil in dollars while selling fuel locally in naira, a situation that has become increasingly difficult due to exchange-rate fluctuations and limited access to crude under the Federal Government’s naira-for-crude programme.
According to Edwin Devakumar, Vice President of Dangote Group, the refinery requires between 13 and 15 cargoes of crude oil each month but currently receives only about seven cargoes under the government arrangement. As a result, it has had to source additional crude from the international market, where payments are made in U.S. dollars.
“We have been absorbing the exchange-rate difference by selling products in naira while purchasing crude in dollars, but the current crude allocation under the naira-for-crude programme is insufficient to sustain that model,” Devakumar said.
Under the new pricing structure, marketers will now pay for petrol, diesel and aviation fuel in dollars when buying directly from the refinery. However, consumers will still purchase fuel at filling stations in naira.
The decision has raised concerns that increased demand for dollars by fuel marketers could put additional pressure on Nigeria’s foreign exchange market. Analysts also warn that if the naira weakens further, marketers’ costs could rise, potentially leading to higher pump prices over time.
The move is also seen as a setback for the government’s naira-for-crude initiative, which was introduced to reduce demand for foreign currency and support domestic refining. Industry experts say the programme will need a more reliable supply of locally produced crude if it is to achieve its intended goals.
With a processing capacity of 650,000 barrels per day, the Dangote Refinery is Africa’s largest refinery and now plays a central role in Nigeria’s fuel supply. Any change in its pricing policy is therefore expected to have significant implications for the country’s energy market and broader economy.
