Dangote Petroleum Refinery has announced a temporary suspension of petroleum product sales in Nigerian Naira, effective immediately. This decision aims to address a discrepancy between the refinery’s sales revenues and its crude oil procurement costs, which are currently denominated in U.S. dollars.
In an official statement released today saying “We wish to inform you that, Dangote Petroleum Refinery has temporarily halted the sale of petroleum products in Naira. This decision is necessary to avoid a mismatch between our sales proceeds and our crude oil purchase obligations, which are currently denominated in U.S. dollars.”
The refinery’s management explained that the volume of petroleum products sold in Naira has surpassed the value of Naira-denominated crude oil received. To mitigate this imbalance, the refinery has opted to align its sales currency with its crude oil purchase obligations.
The refinery emphasized its commitment to serving the Nigerian market efficiently and sustainably. The management assured that upon receiving allocations of Naira-denominated crude oil cargoes from the Nigerian National Petroleum Company (NNPC), sales of petroleum products in Naira will promptly resume.
This development follows recent clarifications from NNPC regarding the Naira-for-crude contract with Dangote Refinery. NNPC stated that the existing agreement was structured as a six-month contract, subject to availability, and is set to expire at the end of March 2025. Discussions are currently underway to establish a new contract.
The suspension of Naira-denominated sales may have broader implications for the Nigerian petroleum market, potentially affecting fuel pricing and availability. Industry stakeholders and consumers are advised to stay informed as the situation develops.
