Nigeria’s Dangote Petroleum Refinery announced a sudden suspension of petrol sales in the local currency, the naira, effective September 28, 2025. The refinery cited crude supply constraints and the exhaustion of its crude-for-naira allocation under an agreement with the Nigerian National Petroleum Company (NNPC) as the primary reasons behind the decision. This move comes at a critical time when Nigeria is grappling with high inflation, a weakening currency, and efforts by the Central Bank of Nigeria (CBN) to reduce dollar demand in Africa’s largest economy.
In a memo sent to customers and seen by Reuters, Dangote Petroleum Refinery & Petrochemicals stated, “We have been selling petroleum products in excess of our Naira-crude allocations, and consequently, we are unable to sustain petrol (PMS) sales in naira moving forward.” The memo advised customers with outstanding naira transactions to request refunds and notified that sales would now be restricted to U.S. dollars until crude supplies priced in naira are replenished.
The refinery, which has a daily processing capacity of 650,000 barrels—the largest in Africa—had previously supported the government’s crude-for-naira swap initiative. This scheme was intended to reduce the demand for dollars by allowing local currency transactions for refined petroleum products, thereby helping to stabilize Nigeria’s fragile foreign reserves and support the naira. However, Dangote’s increasing fuel exports to Europe, West Africa, and the United States have raised concerns about the prioritization of domestic supply and crude allocations.
The suspension has renewed fears of rising fuel prices and escalating pressure on the naira. Analysts warn that the halt of naira-based sales may force petroleum marketers to revert to purchasing fuel in dollars, exacerbating dollar shortages and further weakening the local currency. Nigeria’s inflation currently stands above 20%, which, coupled with subsidy reforms and currency depreciation, has already strained consumers and the broader economy.
In response to the country’s economic challenges, the Central Bank of Nigeria recently cut interest rates to support economic growth and ease the cost of borrowing. This monetary policy easing aimed to stimulate investment and consumption amid persistent inflationary pressures. However, the refinery’s crude supply issues and dollarization of petrol trade potentially undermine these efforts by increasing foreign exchange demand.
Industry observers have expressed concern about the real-life impact of this halt on Nigerian consumers and businesses. Fuel price hikes potentially triggered by dollarized fuel sales could worsen transportation and production costs, feeding into broader inflationary trends. Some Nigerian petroleum marketers report uncertainty regarding supply continuity and pricing, while consumers face the risk of higher pump prices akin to previous spikes following earlier suspensions of naira sales by the refinery earlier in 2025.
Experts emphasize the need for coordinated government and industry action to resolve crude allocation bottlenecks and stabilize domestic petrol supply. A petroleum sector analyst commented, “The crude-for-naira program was designed to reduce exchange rate pressure, but its success depends on consistent crude supply and allocation. Disruptions like this not only affect fuel availability but also spill over to currency stability.”
Looking ahead, Dangote Petroleum Refinery has assured that Naira sales will resume promptly as soon as it receives further naira-denominated crude cargoes from NNPC. Meanwhile, the government and CBN face heightened challenges in balancing dollar demand reduction, inflation control, and domestic fuel supply stability in a complex economic environment.
Summary and Next Steps:
The suspension of petrol sales in naira by Dangote Refinery due to crude supply constraints marks a setback for Nigeria’s efforts to reduce dollar demand and stabilize the naira. Policymakers and industry stakeholders must urgently address crude-for-naira allocation issues and strengthen coordination to ensure uninterrupted domestic fuel supply. The Central Bank’s monetary easing policies require complementary actions in the petroleum sector to mitigate inflationary risks and support economic recovery. Consumers and marketers should monitor updates from Dangote Refinery and the Nigerian National Petroleum Company closely for resumption of local currency fuel sales. A multi-faceted approach will be essential to restore confidence, control fuel prices, and stabilize Nigeria’s foreign exchange environment.
This development underscores the intertwined challenges of energy security, currency management, and economic stability facing Nigeria in 2025.
