…Refinery adjusts ex-depot price to N1,215 per litre after brief dollar experiment
The Dangote Petroleum Refinery has reversed its temporary dollar-only sales policy for petrol, restoring naira transactions effective immediately, a move that has brought palpable relief to petroleum marketers across the country.
The 650,000-barrels-per-day facility announced the return to local currency pricing on Wednesday, ending a policy shift that had lasted barely over a week. The new naira ex-depot price now stands at N1,215 per litre, representing an increase of N140 from the N1,075 rate that was in place before the suspension of naira sales earlier this month.
The refinery’s decision to halt naira transactions on July 15, following a brief period of dollar pricing introduced two days earlier, had created significant turbulence in the downstream sector. Marketers faced difficulties accessing products, as the dollar-denominated system complicated their procurement processes and exposed them to foreign exchange uncertainties.
The resultant supply squeeze forced many independent marketers to source petrol from private depots at inflated rates, with some depots in Lagos charging as high as N1,275 per litre. This, in turn, triggered panic buying among consumers, with long queues reappearing at filling stations in major cities including Lagos and Abuja.
Sources within the industry indicate that the brief move to dollar pricing was necessitated by a growing imbalance between the refinery’s revenue and expenditure streams. The facility had been receiving fewer crude cargoes under the federal government’s naira-for-crude programme, forcing it to procure more crude on the international market at dollar rates.
Meanwhile, the refinery’s product sales had remained predominantly in naira, creating a currency mismatch that placed considerable financial strain on the company. The dollar-pricing experiment was widely seen as an attempt to bridge that gap and shield the refinery from foreign exchange volatility.
The return to naira pricing has been warmly received by downstream operators, who had grown increasingly anxious about the sustainability of the dollar regime. Leaders of the Independent Petroleum Marketers Association of Nigeria expressed satisfaction with the development, describing it as a positive step that would restore stability to the supply chain.
Marketers have reportedly resumed loading activities at the refinery’s gantry, and expectations are high that the resumption of naira transactions will ease the logistical bottlenecks that emerged during the suspension period.
The improved availability is anticipated to gradually bring down pump prices at retail outlets, although the N140 hike at the ex-depot level means consumers may not see a return to previous price levels.
While the restoration of naira pricing removes the foreign exchange hurdles that had complicated marketers’ operations, the accompanying price increase underscores the persistent cost pressures facing the downstream sector. The refinery’s production costs remain largely dollar-denominated, and the new N1,215 rate reflects the underlying realities of global crude prices and currency dynamics.
Nevertheless, the resolution of the week-long impasse has been hailed as a pragmatic step that prioritises market stability and protects the interests of both operators and end-users. For marketers, the return to familiar naira-based transactions means they can once again plan their businesses without the added uncertainty of exchange rate fluctuations.
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