The Dangote Petroleum Refinery has announced the temporary suspension of its Naira denominated crude oil purchase deal, a significant shift in its operational framework.
History of the Agreement
When Dangote Refinery began operations, it secured a crude oil supply agreement with the Nigerian National Petroleum Company (NNPC), allowing it to purchase crude in Naira. This arrangement was aimed at supporting the local refining sector and reducing reliance on dollar transactions. However, due to prevailing economic conditions and the volatility of currency exchange rates, the refinery has now opted to discontinue this model temporarily.
Sale of Petroleum Products in Naira
“As soon as we receive an allocation of Naira-denominated crude cargoes from NNPC, we will promptly resume petroleum product sales in Naira.
Dear valued customers, we wish to inform you that Dangote Petroleum Refinery has temporarily halted the sale of petroleum products in Naira. This decision is necessary to avoid a mismatch between our sales proceeds and our crude oil purchase obligations, which are currently denominated in U.S. dollars,” the statement said.
Depot Price Adjustments Begin
Following this announcement, petroleum depots have begun adjusting their prices. In less than 48 hours after the refinery’s statement, some marketers have started selling petrol at ₦875 per liter, signaling a rapid shift in market dynamics.
