Dangote Refinery Scraps Dollar Pricing for Local Petrol Sales in Nigeria

Nigeria’s Dangote Petroleum Refinery has reversed its decision to sell fuel products to the local market in US dollars. The company announced the change in a statement on Thursday, bringing relief to consumers worried about potential fuel shortages and higher costs.

The refinery had cited difficulties sourcing sufficient crude under the government’s naira-for-crude programme as the reason for dollar pricing. That programme, launched in October 2024, allows domestic refiners to purchase crude in the local currency to ease pressure on foreign exchange reserves.

Dangote said it is now selling gasoline — Nigeria’s most consumed fuel — at 1,215 naira ($0.8895 or roughly Sh115) per litre. The move provides immediate relief to marketers and end users. The refinery, with a capacity of up to 700,000 barrels per day, has become a significant player in the market.

Despite Nigeria being Africa’s largest oil producer, the Dangote facility often struggles to secure adequate local crude supplies. It has sourced cargoes from as far as the United States and Brazil. The refinery has also ramped up exports, including jet fuel, benefiting from global market dynamics linked to conflicts in the Middle East.

The pricing reversal comes amid broader efforts to stabilise Nigeria’s fuel market. Dollar pricing would have increased costs for local buyers and potentially strained foreign exchange availability. The naira-for-crude arrangement is intended to support domestic refining and reduce reliance on imported petroleum products.

For East Africa, including Kenya, developments at Dangote are watched closely. Nigeria’s refining capacity can influence regional fuel supply dynamics and prices. Stable production and local currency pricing help moderate volatility in global and regional markets.

The refinery has faced teething challenges since commencing operations. Supply chain issues, regulatory matters, and feedstock availability have tested its ramp-up. However, its scale positions it as a potential game-changer for Africa’s energy landscape if operational hurdles are overcome.

Dangote Group founder Aliko Dangote has positioned the refinery as a flagship project for industrial self-reliance. The latest pricing decision reflects responsiveness to local market realities and government policy objectives.