Dangote Breaks Silence on Fuel Price Hike, Explains Return to Naira Sales Amid Supply Fears

• A Dangote Refinery official said fuel importers were allegedly withholding stock while waiting for prices to rise further
• The refinery set its gantry price at N1,215 per litre after reverting to naira-denominated petrol sales
• Pump prices across Nigeria are now hovering between N1,260 and N1,300 per litre following renewed global oil market tensions

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Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.

The Dangote Petroleum Refinery has explained why it abruptly abandoned its short-lived dollar-denominated petrol sales and returned to pricing Premium Motor Spirit (PMS) in naira, saying the move was aimed at preventing a nationwide fuel shortage and a steeper rise in petrol prices.

A senior management official of the refinery, who spoke on condition of anonymity because he was not authorised to speak publicly, said the decision was taken after the company observed that fuel importers were allegedly withholding supplies in anticipation of higher prices, according to a Punch report.

Why Dangote returned to naira sales

According to the official, the refinery's decision was driven by market realities rather than any improvement in crude oil supply.

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"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 said.

The refinery recently resumed petrol sales in naira after briefly switching to dollar transactions, a move that had unsettled marketers and raised fears of fresh disruptions in Nigeria's downstream petroleum sector.

Under the revised pricing, the refinery fixed its gantry price at N1,215 per litre, while the coastal price was set at N1,602,495 per metric tonne.

Dollar sales triggered industry anxiety

Dangote's earlier decision to sell petrol in U.S. dollars had sparked widespread concern among fuel marketers, many of whom suspended product loading because they struggled to obtain the foreign exchange required for purchases.

At the time, the refinery defended the move, explaining that it had been forced to source additional crude oil from the international market in dollars after receiving insufficient supplies under the Federal Government's naira-for-crude arrangement.

The latest reversal is expected to ease pressure on marketers and improve product availability across the country.

Talks with FG still ongoing

The refinery also confirmed that discussions with the Federal Government over crude supply arrangements are continuing.

The company expressed optimism that a mutually beneficial agreement would eventually be reached, although the official hinted that unresolved issues remain.

He further alleged that some stakeholders within government still favour exporting Nigeria's crude oil while importing refined petroleum products, a practice the refinery believes undermines local refining capacity.

Depot prices begin to fall

The return to naira sales has already started reshaping the fuel market.

Last week, depot owners increased petrol gantry prices to as much as N1,275 per litre after Dangote temporarily halted loading activities.

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 increase in petrol prices 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.

How depot owners increased their influence

Legit.ng earlier reported that the recent resumption of petrol and diesel loading by fuel marketers at private depots in Nigeria was linked to a week of disruptions linked to price adjustments.

As the Dangote refinery's dollar-pricing policy continues to create market uncertainty, prices surge, sparking concerns about the impact on consumers and the broader economy.