Dangote blames importers for market distortions

By Philippine

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Dangote Petroleum Refinery has defended its recent petrol sales policy, insisting that its decision to resume the sale of Premium Motor Spirit (PMS) in naira was driven by the need to restore stability in Nigeria’s downstream petroleum market after some fuel importers allegedly withheld products in anticipation of higher prices.

The refinery said its pricing decisions were based on prevailing market realities and should not be interpreted as an attempt to dominate the market or disadvantage independent marketers. Instead, it maintained that the objective was to ensure uninterrupted fuel supply while promoting fair competition in Nigeria’s deregulated petroleum sector.

According to the company, after temporarily introducing dollar-denominated pricing due to challenges in sourcing sufficient crude oil under the Federal Government’s naira-for-crude arrangement, it returned to naira sales once conditions improved. The refinery argued that continuing to buy crude in dollars while selling refined products in naira had become financially unsustainable, forcing it to review its pricing structure.

Management further alleged that some fuel importers delayed releasing existing inventories while awaiting higher pump prices, a development it said contributed to artificial supply tightness in parts of the country. The refinery noted that resuming naira-denominated sales was intended to discourage speculation, improve product availability, and stabilize distribution across the market.

Dangote Refinery stressed that it remains committed to supplying petroleum products to all qualified marketers on transparent and non-discriminatory terms. The company added that its pricing reflects international crude oil costs, exchange rate movements, logistics expenses, and other operational realities affecting refining and distribution.

Industry observers say the refinery’s explanation comes amid renewed debate over fuel pricing following recent adjustments in ex-depot prices. They noted that the refinery has become a major supplier of petrol in Nigeria, making its pricing decisions increasingly influential on retail pump prices nationwide.

The development has also reignited discussions over the implementation of the Federal Government’s naira-for-crude policy, which was introduced to reduce pressure on foreign exchange demand by allowing domestic refiners to purchase crude oil in the local currency. However, refinery officials have argued that inadequate crude allocations under the arrangement forced them to import additional crude at international market prices, increasing operating costs.

Energy analysts believe the return to naira sales could improve liquidity in the domestic fuel market and reduce pressure on marketers seeking foreign exchange for product purchases. Nevertheless, they caution that sustained stability will depend on consistent crude oil supply to local refineries, transparent market competition, and effective regulatory oversight.

The Dangote Refinery, Africa’s largest single-train refinery, has become central to Nigeria’s efforts to reduce dependence on imported petroleum products and strengthen domestic refining capacity. Recent expansion plans are expected to further boost production and support long-term energy security for Nigeria and the wider African market.