Nigeria’s hope for cheaper fuel faces a major hurdle as the 650,000 bpd-capacity refinery begins to demand US dollars for petrol sales, creating a new challenge for marketers.
The decision by the Dangote Petroleum Refinery and Petrochemicals to suspend sales of Premium Motor Spirit (PMS), also known as petrol in Nigerian Naira, has raised fears of a potential hike in price.
In a statement released on Friday, signed by its Group Commercial Operations, the 650,000 barrels per day (bpd) refinery announced that it will suspend the sale of petrol in naira starting from Sunday, September 28, 2025, saying it had exhausted the crude allocated to it in naira.
The company said it had been selling petroleum products beyond its naira-crude allocations and can no longer sustain the transactions in naira going forward.
“Dangote Petroleum Refinery & Petrochemicals has been selling petroleum products in excess of our naira-crude allocations and, consequently, we are unable to sustain PMS sales in naira going forward. Kindly note that this suspension of naira sales for PMS will be effective from Sunday, 28th of September, 2025,” the statement read.
The company advised customers with pending naira-based transactions who would like a refund to formally request the processing of their refund.
It said it would communicate to customers when to resume sales in naira once the situation improves.
This policy shift contradicts earlier expectations of fuel marketers and threatens to trigger a significant increase in the pump price of petrol across the country.
The naira-for-crude deal which allows exchange of crude oil and refined petroleum products in naira was introduced by the Federal Government in 2024 shortly after the Dangote Refinery commenced supply of petroleum products. The initiative was designed to ease foreign exchange pressure and make petroleum products cheaper across the country.
The refinery had suspended sales of petroleum products in naira in March 2025, citing inadequate crude-for-naira allocations, but later resumed following resolution of the supply challenge by the federal government. The suspension then raised fears of dollarization of fuel sales and pushed petrol pump prices to nearly ₦1,000 per litre.
READ ALSO: PENGASSAN Orders Shutdown of Crude, Gas Supply to Dangote Refinery
Industry analysts have observed that with the $20 billion refinery’s operations heavily dependent on importing crude oil, which is priced internationally in U.S. dollars, it therefore needs a steady inflow of dollars to pay its suppliers. With the shortage of naira-denominated crude supply to the naira, the refinery found it unsustainable to continue selling refined products in the local currency amid critical need for foreign currency for international transactions.
The latest suspension of petrol sales in naira comes amid controversy between the Dangote Refinery and labour unions. The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) had on Friday, September 26, accused the refinery of anti-labour practices following the disengagement of some refinery workers said to be Nigerians. PENGASSAN claimed that more than 800 Nigerian workers were sacked after they joined the union. It directed its members to halt gas and crude oil supplies to the refinery in an attempt to force the company to recall the disengaged workers.
The refinery management said the staff layoff was part of ongoing reoganisation of the company in response to repeated acts of sabotage.
Fuel Price concerns
Reacting to the development, an economic expert, Cyril Ezea, said the suspension of petrol sales naira poses risks to surge in prices.
In a chat with Pinnacle Daily, Ezea said it would force local fuel marketers to source dollars to buy products from the Dangote Refinery, putting pressure on foreign exchange and attendant implication on inflation. “They will likely source these dollars from the more expensive black market, where the exchange rate is significantly higher than the official rate. This increased cost will be passed directly to consumers,” he observed.
“A hike in the pump price of petrol has a cascading effect on the entire economy. It increases transportation costs, which in turn raises the price of food, goods, and services, fueling broader inflation,” the economic expert further stated.
READ ALSO: Dangote Refinery Suspends Sales to Unregistered Marketers
The development has triggered reactions from Nigerians online. While some are criticising Dangote Refinery’s action, others are blaming the NNPC and the government for failing to guarantee the company steady and sufficient supply of crude oil in naira to maintain the deal.
“If this holds true, then we’re officially in trouble. Suspending sales in Naira means ordinary Nigerians will bear the brunt of FX chaos. A refinery built on Nigerian soil shouldn’t operate like it’s in a foreign land,” an X user, Mercy stated.
“If Dangote Refinery stops selling petrol in Naira, it could trigger serious pressure on fuel prices and the exchange rate. What’s the government’s plan to cushion the impact on Nigerians?,” an X user AJ Daniel wrote.
Another X user called on the Federal Government and Dangote Refinery to go back to the discussion table while efforts are made to ramp up crude production.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in Mass Communication. He can be reached via @VICTOREZEJA on X
