The Dangote Petroleum Refinery has revealed that its decision to resume the sale of Premium Motor Spirit (PMS), popularly known as petrol, in naira was driven by concerns over alleged stockpiling by fuel importers. According to a senior management official, the move was made to protect Nigerians from a potential fuel shortage and prevent another sharp increase in pump prices. The official explained that some importers were deliberately withholding their products from the market while waiting for prices to rise, prompting the refinery to act in what it described as the country’s best interest.
The refinery recently announced the return to naira-based petrol sales after briefly switching to dollar-denominated transactions, a decision that had unsettled stakeholders across Nigeria’s downstream petroleum sector. The change comes with a gantry price of ₦1,215 per litre, while the coastal price was fixed at ₦1,602,495 per metric tonne. The earlier decision to sell in dollars had forced many independent marketers to suspend purchases because they struggled to access the foreign exchange needed to buy fuel, sparking fears of supply disruptions across the country.
Despite the policy reversal, the refinery stressed that its crude oil supply challenges have not been fully resolved. The management maintained that the temporary dollar pricing became necessary after supplies under the Federal Government’s naira-for-crude arrangement reportedly declined, forcing the refinery to source additional crude oil from the international market using dollars. However, company officials disclosed that discussions with the Federal Government are still ongoing, expressing optimism that a mutually beneficial agreement would eventually be reached to stabilize local refining operations.
The refinery also expressed concern over what it described as the long-standing preference by some players to export Nigeria’s crude oil while importing refined petroleum products. Before the Dangote Refinery began commercial operations in 2024, Nigeria relied heavily on imported petrol despite being one of Africa’s largest crude oil producers. The poor performance of state-owned refineries in Port Harcourt, Warri, and Kaduna left consumers vulnerable to recurring fuel shortages, subsidy controversies, and fluctuating prices. The emergence of local refining has since reshaped the downstream market by increasing competition and reducing dependence on imports.
Industry observers believe the refinery’s latest decision has already begun influencing market prices. After Dangote announced its revised gantry price, several depot owners reduced their own prices to remain competitive, with depot rates now ranging between ₦1,215 and ₦1,220 per litre. Meanwhile, petrol pump prices currently sell for between ₦1,260 and ₦1,300 per litre, depending on location. Analysts warn that while rising global crude oil prices—driven by renewed tensions in the Middle East and disruptions to Red Sea shipping routes—could boost Nigeria’s export earnings, they may also increase inflation and place additional pressure on consumers if domestic fuel supply remains unstable.
source: punch
