Marketers, experts kick as Dangote Refinery pegs fuel prices to US dollars
Independent petroleum marketers and energy experts have strongly rejected the decision of the Dangote Petroleum Refinery to price its petroleum products in US dollars, warning that the move could trigger severe foreign exchange (FX) pressures and destabilise Nigeria’s downstream oil sector.
The controversy erupted following an announcement by the $20 billion refinery that all ex-depot prices for Premium Motor Spirit (PMS/petrol), Automotive Gas Oil (AGO/diesel), and aviation fuel (Jet A1) will now be quoted in dollars. The decision effectively invalidates all previous naira-based invoices issued to marketers.
Dollarisation moves?
Reacting to the development, the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) expressed deep concern, warning that the move could gradually push the country toward a fully dollarised economy.
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Speaking on the development, PETROAN National President, Dr. Billy Gillis-Harry, urged the refinery to align its business model with the country’s broader economic interests.
“This will turn Nigeria into a dollarised economy. Commercial decisions by a major player must align with national economic objectives,” Gillis-Harry stated.
He warned that marketers, if forced to source dollars to purchase fuel, would have no choice but to pass the financial burden onto already struggling Nigerian consumers.
“It is like saying those who buy from Dangote in dollars should also sell in dollars to the masses. But we are not going to do that,” the PETROAN boss added.
Similarly, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has appealed to President Bola Ahmed Tinubu to intervene. IPMAN urged the Federal Government to sustain the “Naira-for-Crude” arrangement, emphasizing that tying domestic fuel prices to the greenback would only increase pump price volatility across the country.
Pump prices surge across depots
The impact of the new dollar-based pricing model is already being felt at the depots, with operators swiftly adjusting their prices to reflect replacement costs.
A survey of key hubs reveals significant price hikes.
For instance, in Port Harcourt, petrol prices jumped by ₦113 per litre, while diesel surged by ₦150 per litre.
In Lagos and Warri, similar upward adjustments were recorded as marketers scrambled to hedge against currency fluctuations under the new pricing template.
Commercial reality vs. legal tender
The development has split opinions among energy experts, highlighting the complex intersection of business survival and national monetary policy.
Prof. Wumi Iledare, a prominent energy economist, defended the refinery’s decision as a standard business response to Nigeria’s volatile FX market.
“Aligning revenues with major cost obligations is a standard risk-management response. It should not automatically be interpreted as abnormal pricing behaviour,” Iledare argued, pointing out that the refinery faces dollar-denominated obligations.
However, Prof. Dayo Ayoade of the University of Lagos (UNILAG) strongly disagreed, insisting that the sovereignty of the local currency must be respected. He maintained that domestic transactions within Nigeria must be conducted in Naira, the nation’s legal tender, and called on regulatory bodies to immediately review Dangote’s new policy.
While industry stakeholders acknowledge that the landmark refinery has significantly boosted local fuel supply security, they are calling on the government and regulatory agencies to step in, ensure fair competition, and protect consumers from further economic hardship.
