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Nigeria’s Dangote Petroleum Refinery has started pricing its local fuel sales in US dollars, blaming severe domestic crude supply constraints for disrupting its operations.
A company spokesperson explained on Tuesday that the refinery cannot secure enough raw material under the government’s local-currency “naira-for-crude” programme, forcing the shift to dollar-based pricing.
The company’s new pricing template sets the ex-depot price of petrol at $0.779 per litre, diesel at $1.087 per litre, and aviation fuel at $0.942 per litre.
Edwin Devakumar, vice president of the Dangote Group, stated that the refinery previously absorbed heavy currency losses by purchasing crude in dollars and selling the refined products in naira.
However, the lack of sufficient domestic crude supply ultimately made that arrangement impossible to sustain.
While the state-owned Nigerian National Petroleum Company Limited recently increased Dangote’s allocation to seven crude cargoes in May, the refinery requires 13 to 15 cargoes monthly to run its 700,000-barrel-per-day facility.
This shortfall forces the company to import the remaining balance at international rates.
Financial experts warn that pricing local fuel in dollars will drive up demand for foreign currency among local marketers and tie domestic fuel prices directly to exchange-rate volatility.
