Dangote Petroleum Refinery has reinstated naira-denominated sales of Premium Motor Spirit (PMS), commonly known as petrol, after a brief period of selling in US dollars. This move marks a return to local currency transactions for the refinery's products. The new ex-depot (gantry) price for petrol has been set at N1,215 per liter, which is an increase of N140 per liter, or 13.02%, from its previous price of N1,075 per liter.
The refinery's temporary shift to dollar-denominated sales was attributed to difficulties in sourcing sufficient crude oil under the Nigerian government's naira-for-crude initiative. This policy was intended to allow the Nigerian National Petroleum Company (NNPC) to sell crude oil to Dangote in naira, with the refinery then supplying the domestic market with fuel priced in local currency. The disruption in naira-for-crude supplies led to a currency mismatch for Dangote, as it was paying for inputs in dollars but selling outputs in naira, making the dollar sales a necessary adjustment to operational costs, especially amidst volatile global crude oil prices.
Following the suspension of naira sales, ex-depot petrol prices in Lagos climbed to as high as N1,275 per liter. The resumption of naira transactions, despite the higher price, is expected to alleviate some pressure on Nigeria's foreign exchange market by reducing the demand for dollars by local marketers. While the increased price may somewhat negate the benefits for consumers, the return to naira sales is seen as a positive development for market stability.
Industry sources have confirmed that marketers have been informed about the resumption of gantry operations, and loading under the revised naira pricing structure is set to begin immediately. This decision effectively reverses the refinery's earlier move to sell all its petroleum products, including petrol, Automotive Gas Oil (diesel), and Aviation Turbine Kerosene (jet fuel), on a dollar-denominated basis, which had raised concerns about increased pump prices and added strain on the naira.
