Dangote Refinery Dollar Sales Spark Petrol Price Hike Fears in Nigeria
Dangote Refinery as at March 20, 2025 – Nigeria’s energy landscape is facing a seismic shift as the Dangote Petroleum Refinery, Africa’s largest oil processing facility, announced a temporary suspension of petrol sales in naira, opting for dollar-based transactions. This decision, revealed on March 19, 2025, via Reuters, has ignited widespread concern over an imminent petrol price hike and further economic strain in a country already grappling with inflation and currency depreciation.
Why Dangote Refinery Stopped Naira Sales
The refinery, with its massive 650,000-barrel-per-day capacity, cited a mismatch between its naira-denominated sales and the dollar-based crude oil purchases as the primary reason for the shift. According to a statement from Dangote Group reported by Reuters, the value of naira sales exceeded the naira-priced crude received from the Nigerian National Petroleum Company Limited (NNPC). This suspension will remain in place until the government resumes its crude-for-naira arrangement, a policy aimed at reducing Nigeria’s reliance on imported fuel.
The move comes amid ongoing tensions with NNPC, which has struggled to supply the agreed minimum of 385,000 barrels per day to the refinery. Edwin Devakumar, head of Dangote Refinery, previously highlighted this shortfall in November 2024, as noted by Business Insider Africa, stating that the facility requires 650,000 barrels daily to operate at full capacity. To bridge the gap, the refinery has diversified its crude supply, importing from countries like Angola, Brazil, and the U.S., according to Kpler data cited in Financial Post.
Recent efforts to secure alternative sources include a purchase of Equatorial Guinea’s Ceiba crude, reported by Punch Newspapers, and Algeria’s Saharan Blend crude from Glencore, due to arrive between March 15-20, as per Business Insider Africa.
Economic Fallout: Petrol Prices and Naira Value at Risk
The shift to dollar sales has sent shockwaves through Nigeria’s downstream oil sector. Industry experts warn that this could trigger a petrol price hike, as local fuel traders scramble for dollars in an already strained foreign exchange market. The Independent Petroleum Marketers Association of Nigeria (IPMAN) has threatened to sell petrol in dollars if Dangote proceeds, a move that could push fuel costs beyond the reach of many Nigerians, as reported by Reuters.
Chinedu Ukadike, IPMAN’s national publicity secretary, emphasized that dollar transactions would be necessary to offset financial losses if crude remains priced in foreign currency. “We’re not blaming Dangote; it’s a business decision,” he said, urging the federal government to intervene, a sentiment echoed in posts found on X.
Public frustration is palpable. On platforms like X, Nigerians have voiced concerns about rising living costs, with comments reflecting fears of economic fallout from the refinery’s decision, as seen in posts like those from @Afri_bull on March 19, 2025.
Legal Battles Intensify
Adding to the drama, a Federal High Court in Abuja ruled on March 18, 2025, against NNPC’s objection to a N100 billion lawsuit filed by Dangote Refinery, as detailed by Reuters. The suit seeks to halt petrol imports by NNPC and other marketers, claiming the refinery’s output meets domestic demand. Justice Inyang Ekwo dismissed NNPC’s claim that the suit was incompetent, allowing Dangote to amend its filings and proceed, with the next hearing set for May 6.
This legal victory underscores the refinery’s push to dominate Nigeria’s fuel market and end decades of import dependency, a goal Aliko Dangote has championed since the refinery’s inception.
Dangote Refinery’s Broader Impact in 2025
Despite these challenges, the Dangote Refinery remains a game-changer. Since beginning gasoline production in September 2024, it has supplied up to 60% of Nigeria’s petrol needs, according to S&P Global cited in Business Insider Africa. Its potential to hit full capacity could transform Nigeria from a fuel importer to an exporter, disrupting European markets and saving scarce foreign exchange, as projected by OilPrice.com.
However, crude supply issues persist. An explosion on the Trans Niger pipeline on March 17, 2025, delayed Bonny oil loadings, complicating local sourcing, as noted in industry reports. Meanwhile, NNPC has delivered fresh crude cargoes to the refinery, with Punch Newspapers reporting large shipments on March 14, 2025, amid negotiations to extend the naira-for-crude deal beyond its March 31 expiration, per Yahoo News.
What’s Next for Nigeria’s Fuel Market?
As the Dangote Refinery navigates these turbulent waters, all eyes are on the federal government and NNPC. Will the crude-for-naira deal be renewed? Can Nigeria avoid a fuel crisis amid dollar-based sales? For now, the refinery’s latest move has cast a shadow over its promise of energy independence, leaving Nigerians anxiously awaiting answers.
Stay tuned for more updates on the Dangote Refinery latest news 2025 as this story unfolds.
