LAGOS, NIGERIA – The massive Dangote Petroleum Refinery, Africa’s largest single-train facility, has announced the immediate resumption of petrol sales in Nigeria’s local currency, the naira, following an intervention by a federal government technical committee.
The refinery, owned by Africa’s richest man, Aliko Dangote, had previously informed marketers that it would halt naira sales due to the exhaustion of its dedicated crude oil allocation under a special government arrangement.
In a memo circulated to marketers on Saturday, the refinery confirmed the reversal: “Following the intervention of the Naira for Crude Technical Committee Chairman, we are pleased to inform you of the resumption of PMS sales in Naira commencing immediately.”
Background on the Currency Allocation
The brief suspension had raised concerns among industry observers, as the refinery is a central component of the government’s strategy to achieve energy self-sufficiency and stabilise the naira.
The refinery’s operations rely on the “naira-for-crude” allocation system, where the government or state oil company ensures the refinery receives a steady supply of domestic crude oil. In exchange, the refinery sells a portion of its refined products in the local currency, which is intended to reduce the demand for US dollars needed for fuel imports.
The facility had suspended sales, citing that it had sold more fuel in naira than was covered by its current crude allocation, prompting the need for a high-level government committee intervention to resolve the dispute and secure future supply continuity.
Significance of the Refinery
The Dangote Refinery, built at a cost of approximately $20 billion, is designed to process 650,000 barrels of oil per day. The complex is widely viewed as a game-changer for Nigeria, aiming to end the country’s decades-long reliance on imported refined products—despite being a major crude oil producer.
The resumption of naira sales is also critical given the ongoing tension between the refinery and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), which recently ordered members in key upstream firms to cut off crude and gas supplies over an escalating industrial dispute.
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