Panic Sets in as Dangote Refinery Halt Naira Transactions
Dangote Petroleum Refinery has stopped selling petroleum products in Naira. This is due to the mismatch between the refinery’s sales proceeds and crude oil purchase obligations which are in US Dollars.
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The 650,000bpd refinery has been the backbone of Nigeria’s energy independence bid. But challenges have arisen from the currency mismatch between revenues and expenses. The company said its sales in Naira is more than the value of Naira-denominated crude received, hence the need to change its sales currency to match its procurement obligations.
This has raised concerns of increases in petrol price and further depreciation of Naira as local fuel marketers may now need to source for US dollars for transactions. The refinery’s struggle to get crude volume under the government’s arrangement which allowed it to buy crude in Naira for the initial 6 months from October 2024 has compounded the issue. Despite efforts to reduce petrol price and importation of gasoline, the refinery has not received the agreed crude volume under this agreement. NNPC is currently discussing to renew the agreement.
The management of the refinery debunked rumors circulating online that they have stopped operations due to alleged ticketing fraud, describing the reports as malicious falsehoods. They said their systems are robust and there’s no issue of fraud.
The refinery will continue to serve the Nigerian market efficiently and sustainably. The management said once they get an allocation of Naira-denominated crude cargoes from NNPC, petroleum product sales in Naira will resume.
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