Dangote resumes naira sales of petrol, fixes gantry price at N1,215/litre

Dangote Petroleum Refinery has reinstated naira-denominated sales of Premium Motor Spirit, reversing a dollar-pricing regime that rattled Nigeria’s downstream fuel market for more than a week and sent pump prices surging above N1,270 a litre at some depots.

The Lekki-based refinery fixed its gantry price at N1,215 per litre, according to a notice sent to marketers and off-takers, marking a return to local-currency transactions after the company switched petrol, diesel, and aviation fuel sales to U.S. dollars on July 13.

The reversal offers marketers and, by extension, motorists a measure of relief after a chaotic stretch in which depot owners repeatedly raised ex-depot prices to cover dollar-linked costs, with some quoting as high as N1,275 a litre in Lagos.

The volatility triggered a few instances of panic buying, long queues, and localised supply shortages at retail outlets in Lagos and Abuja as marketers scrambled to source fuel from private depots while the refinery’s own currency stance remained unsettled.

The naira sales halt had been tied to strains in the federal government’s crude-for-naira initiative, under which local refiners are meant to receive crude oil in the local currency to ease dollar demand and stabilise pump prices.

Dangote had said its petroleum product sales in naira had outpaced the naira-denominated crude allocations it was actually receiving from the state oil company, forcing a temporary switch to dollar pricing to match its procurement costs.

For marketers, the shift back to naira removes a source of foreign-exchange exposure that had complicated planning and squeezed margins industry-wide.

The Independent Petroleum Marketers Association of Nigeria had pressed the government to intervene, warning that a prolonged dollar-pricing regime risked feeding directly into retail pump prices and stoking inflation in an economy already under pressure from currency volatility.

It remains to be seen how quickly the lower gantry price filters through to filling stations, where retail prices also reflect transport, distribution and dealer margins layered on top of the ex-depot benchmark.

Depot owners who built up dollar-priced inventory during the suspension may be slower to adjust their own rates downward.

Dangote’s refinery, the world’s largest single-train facility, has emerged as Nigeria’s dominant supplier of refined products since ramping up petrol output, giving its pricing decisions outsized influence over the downstream market.