- Dangote Refinery had earlier justified its decision, citing an imbalance between its sales revenue (in Naira) and crude oil purchase obligations (in dollars).
- The six-month crude-for-Naira deal with NNPC, which expires on March 31, was initially designed to provide a steady crude supply in exchange for refined petroleum products.
Anxiety is growing among Nigerians as Dangote Refinery prepares to halt the sale of petroleum products in Naira on March 31. This move is expected to trigger economic ripple effects and further strain household budgets.
In separate interviews with the News Agency of Nigeria (NAN), residents of Ibadan expressed fears that the decision could drive up prices of goods and services, worsen inflation, and intensify the demand for US dollars in the foreign exchange market.
A graphic designer, Oluyemi Ojeyemi, pointed out that fuel price fluctuations directly impact daily life, warning that switching to dollar transactions could erase recent gains from lower petrol prices.
“When Dangote Refinery was purchasing crude in Naira, there was a reduction in the price of petrol sold to Nigerians. If the company now starts to buy in dollars, it will affect the masses,” he said.
He urged the government to step in and negotiate measures to ease the burden on Nigerians.
Dangote Refinery had earlier justified its decision, citing an imbalance between its sales revenue (in Naira) and crude oil purchase obligations (in dollars).
A civil servant, Mrs Enobong Adefusi, criticised business owners for exploiting fuel price changes to justify price hikes, saying Nigerians would ultimately bear the brunt of Dangote’s shift to dollar transactions.
“One of the things the government can do is to ensure the cost of transportation is reduced. The reduction of transportation costs will affect all other things in the country. However, this cannot happen if there are no negotiations with Dangote Refinery to continue selling fuel in Naira,” she argued.
Public sector worker Timothy Ajiboye urged the government to extend Dangote’s Naira agreement, stressing that Nigeria’s external reserves remain fragile. He suggested that Dangote Refinery can make its profits by selling to other countries in foreign currencies, but it should continue to sell fuel in Naira domestically.
NAN reports that Dangote Refinery—Africa’s largest, 650,000 barrels per day capacity—has struggled to secure crude from local producers due to NNPC Limited’s failure to honour its crude swap agreement.
The six-month crude-for-Naira deal, which expires on March 31, was initially designed to provide a steady crude supply in exchange for refined petroleum products.
Financial expert Tunji Adepeju argued that Dangote should have renegotiated the agreement before publicly announcing the switch to dollar transactions. He stated that he believed Dangote was selling refined products in dollars to other countries while he was buying in Naira, suggesting that Dangote was trying to play smart.
Adepeju also noted that the NNPCL had already committed Nigeria’s crude oil sales to other buyers up to 2030, suggesting that Dangote should have secured long-term supply agreements before setting up his refinery.
“This is not how to do serious business, especially in the oil and gas industry. If you’re building a refinery, you should have ensured access to crude beforehand, not scramble for supply later,” he argued.
Adepeju acknowledged that market forces and competition contributed to the recent reduction in the price of petrol.
“Petrol was sold between N865 and N875 per litre yesterday, while I bought diesel at N1,080—cheaper than NNPC’s N1,105 per litre. That’s the way the market should operate,” he noted.
With less than a week before the March 31 deadline, all eyes are now on Dangote Refinery, the government, and NNPC Limited as stakeholders await a possible last-minute resolution to prevent further economic strain on Nigerians.