Petrol Price Set to Rise Again as Marketers Raise Alarm Over Dangote Refinery's Dollar Sales Plan
- IPMAN has warned that petrol prices could rise if the Dangote Petroleum Refinery starts selling refined products in U.S. dollars
- The association said marketers would need to buy dollars to purchase fuel, increasing costs that would likely be passed on to consumers
- IPMAN blamed the situation on crude supply challenges, foreign exchange pressures, and global oil market uncertainty
Legit.ng journalist Victor Enengedi has over a decade's experience covering energy, MSMEs, technology, banking and the economy.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has cautioned that Nigerians could soon pay more for petrol if the Dangote Petroleum Refinery begins selling refined petroleum products in U.S. dollars instead of naira.
The warning follows reports that the 650,000-barrel-per-day refinery is considering a return to dollar-denominated transactions amid rising foreign-exchange obligations and concerns about crude oil supply.
Source: UGC
Dollar sales could push petrol prices higher
Speaking in an interview with The Sun, IPMAN's National Public Relations Officer, Chinedu Ukadike, said the association had not received any official notification from the Dangote refinery regarding the reported plan. However, he noted that such a decision would not be unexpected given the financial pressures facing the facility.
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According to him, if the refinery switches to dollar sales, petroleum marketers would have to source foreign exchange to purchase products. This development would inevitably increase operating costs and translate into higher pump prices for consumers.
Akadike said:
“If the refinery eventually returns to dollar sales, it will certainly have implications for the downstream market. Marketers will have to source dollars to buy products, and those costs will ultimately reflect at the pump.”
Ukadike explained that any additional cost incurred by marketers in accessing dollars would likely be passed on to motorists, potentially ending the relative stability in petrol prices experienced in recent months.
He added that players in the downstream sector are closely monitoring the situation because changes in the refinery's cost structure have direct implications for fuel pricing across the country.
Crude supply challenges mount pressure on refinery
The concerns come months after the Dangote Petroleum Refinery, on March 19, 2025, temporarily suspended the sale of petroleum products in naira.
At the time, the company explained that the move was aimed at preventing a mismatch between its naira sales proceeds and its crude oil purchase obligations, which are largely denominated in U.S. dollars.
Industry stakeholders say the refinery's foreign exchange requirements have increased due to multiple factors, including insufficient crude supply under the federal government's naira-for-crude arrangement, heightened geopolitical tensions in the Middle East, particularly around the Strait of Hormuz, and the resumption of fuel imports by marketers.
Global crude oil prices have also remained volatile amid renewed tensions involving Iran, adding further uncertainty to the operating environment for refiners.
Industry calls for stable crude supply
Ukadike stressed that the issue extends beyond Dangote Refinery and highlights wider structural challenges in Nigeria's downstream petroleum industry, especially the availability of crude oil for domestic refining.
He warned that unless crude supply to local refineries improves and foreign exchange pressures ease, refiners may continue to face operational difficulties that could ultimately be reflected in higher fuel prices.
Dangote Refinery resumes free petrol delivery
Meanwhile, Legit.ng earlier highlighted facts about Dangote Refinery's newly resumed free petrol delivery programme, which aims to significantly decrease fuel supply costs across Nigeria.
This initiative not only eliminates transportation fees for qualified marketers but also introduces a structured credit facility that may reshape the nation’s fuel distribution landscape and enhance accessibility for consumers.
Source: Legit.ng
