Fresh concerns have emerged over the possibility of another increase in petrol prices after reports indicated that the Dangote Petroleum Refinery may begin selling Premium Motor Spirit (PMS) and diesel in U.S. dollars.
The development comes as renewed geopolitical tensions in the Middle East continue to drive up global crude oil prices, raising fears of higher fuel costs and increased pressure on Nigeria’s foreign exchange market.
According to industry sources, the proposed move is linked to uncertainty surrounding the Federal Government’s naira-for-crude arrangement with the Nigerian National Petroleum Company Limited (NNPC). The initiative was designed to allow Dangote Refinery to buy crude oil in naira and sell refined products locally in the same currency, helping to reduce reliance on foreign exchange and stabilize fuel prices.
However, sources say the refinery has not received sufficient crude supplies under the arrangement and has increasingly relied on imported crude purchased in U.S. dollars. Selling fuel in naira while buying crude in dollars exposes the refinery to significant exchange-rate losses whenever the naira weakens.
Analysts warn that if fuel sales are eventually denominated in dollars, petroleum marketers would need to source foreign exchange before purchasing products. This could increase operational costs, weaken the naira through higher demand for dollars, and ultimately lead to higher pump prices and inflation.
Reacting to the reports, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, urged caution, noting that Dangote Refinery has yet to make any official announcement on the matter.
He explained that any decision to sell in dollars would likely be a commercial strategy aimed at managing exchange-rate and crude price volatility rather than an arbitrary pricing policy. Yusuf added that the real challenge remains the instability in the global oil market, which has made fuel pricing increasingly unpredictable.
Oil and gas expert Dr. Ayodele Oni also noted that the naira-for-crude arrangement was never intended as a subsidy or discount scheme. According to him, once the refinery is forced to purchase crude in dollars due to inadequate local supply, continuing to sell products in naira becomes commercially unsustainable.
Oni warned that a shift to dollar sales could place additional pressure on Nigeria’s foreign exchange market, increase fuel prices, and worsen inflation. He, however, expressed optimism that government intervention could restore naira-denominated transactions, as seen in previous instances.
Experts say a long-term solution lies in guaranteeing adequate domestic crude supply to local refineries or introducing a credible mechanism to protect refiners from exchange-rate risks.
For now, there has been no official confirmation from Dangote Refinery that it will begin selling petroleum products in U.S. dollars, leaving stakeholders awaiting a formal statement.
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