Looming Fuel Price Hike: Dangote Refinery Suspends Naira Sales Due to Exhausted Crude Allocation
The Dangote Petroleum Refinery has sent shockwaves through the downstream oil sector with the announcement of a suspension of Premium Motor Spirit (PMS) sales in the local currency, the Naira, effective from Sunday, September 28, 2025.
The refinery, a cornerstone of Nigeria’s projected energy independence, informed its customers via an email notice that it could “no longer sustain PMS sales in Naira” after exhausting its allocation of crude oil under the government’s Naira-for-Crude deal.
The official statement from the Group Commercial Operations of Dangote Petroleum Refinery & Petrochemicals explained that the decision was necessary because the value of their Naira-based product sales had significantly surpassed the Naira-denominated crude they had received. This mismatch forces the refinery to align its sales currency with its crude purchase obligations, which are largely in US Dollars. The company has advised customers with pending Naira transactions to formally request refunds.
Industry analysts are warning that the latest move is likely to intensify pressure on the already volatile foreign exchange market and could trigger a new round of inflation. Market experts, like the Chief Executive Officer of Petroleumprice.ng, Jeremiah Olatide, have projected that petrol prices could once again soar above per litre if transactions shift predominantly to the Dollar. This re-introduces the spectre of dollarisation of fuel sales, a scenario that previously led to volatility in March 2025 when the refinery first briefly halted local currency transactions.
The suspension adds to a turbulent period for the facility, as it simultaneously faces a bitter industrial crisis. Labour unions, including the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), have accused the company of anti-labour practices following the alleged mass termination of hundreds of Nigerian workers, a claim the management has partially denied, attributing the staff reduction to a necessary reorganisation to address sabotage. Stakeholders across the country are now urging the government to quickly resolve the crude allocation issue to prevent major disruptions to the stabilising domestic fuel market.
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