The Dangote Petroleum Refinery has disclosed that its decision to resume the sale of Premium Motor Spirit (PMS) in naira was driven by the need to avert a potential fuel shortage after marketers importing petrol allegedly began withholding supplies in anticipation of higher market prices, according to a report by The PUNCH.
A senior management official of the refinery, who spoke on condition of anonymity because he was not authorised to comment publicly, said the decision was taken to stabilise the domestic market rather than because challenges surrounding crude oil supply had been resolved.
According to the official, the refinery observed that some importers were deliberately slowing product releases while waiting for petrol prices to rise, a situation that could have worsened supply across the country if left unchecked.
"We took a decision in the interest of the country to start selling Premium Motor Spirit in naira after we noticed that importers were holding back their products while waiting for prices to increase," the official said.
The disclosure comes days after the refinery abandoned its short-lived dollar-denominated pricing regime and restored naira sales for petrol.
Under the revised pricing template announced by the refinery's commercial department last week, the gantry price of petrol was fixed at ₦1,215 per litre, while the coastal loading price was set at ₦1,602,495 per metric tonne.
The move reversed an earlier decision to price petrol in U.S. dollars, a policy that unsettled the downstream petroleum market and prompted intervention by the Federal Government.
Industry operators had suspended purchases from the refinery after the dollar pricing policy was introduced, citing difficulties in sourcing foreign exchange needed for transactions.
The refinery had previously explained that the temporary shift to dollar sales became necessary because it was no longer receiving adequate crude oil under the Federal Government's naira-for-crude arrangement and had resorted to sourcing additional feedstock from the international market in dollars.
Despite restoring naira transactions, the Dangote official maintained that discussions with the Federal Government over crude supply arrangements were still ongoing.
"We are still in talks with the government, but I hope they will be sincere," the official said.
He also criticised what he described as a longstanding preference by some government officials for exporting crude oil while importing refined petroleum products instead of strengthening domestic refining.
"As you know, they prefer selling crude to traders abroad and importing refined petroleum products back into the country," he added.
Before the commencement of operations at the Dangote refinery in 2024, Nigeria relied heavily on imported petrol despite being one of Africa's largest crude oil producers, as the Port Harcourt, Warri and Kaduna refineries remained largely inactive for years. That dependence contributed to recurring fuel shortages and sustained the country's controversial fuel subsidy regime.
The commencement of production at the Dangote refinery altered the structure of Nigeria's downstream petroleum market by expanding domestic refining capacity, while the Nigerian National Petroleum Company Limited (NNPCL) also phased out implicit fuel subsidies, significantly reducing the long queues that had become common at filling stations.
The refinery's decision to resume naira sales has also influenced pricing across the downstream market. Following the temporary suspension of gantry loading earlier this month, several depot owners increased petrol prices to as high as ₦1,275 per litre amid tightening supply. However, after Dangote announced the new ₦1,215 per litre gantry price, depot operators adjusted their prices downward to remain competitive.
The refinery's pricing decisions have also coincided with heightened volatility in the international oil market. Global crude prices briefly climbed above $100 per barrel last week for the first time in nearly two months after escalating attacks on commercial shipping in the Red Sea heightened concerns over supply disruptions across key global energy routes before retreating to about $96 per barrel at the close of trading on Friday.
While stronger crude prices could boost Nigeria's oil export earnings and government revenue, industry analysts warn that sustained increases in international oil prices may also raise the replacement cost of refined petroleum products, intensify inflationary pressures and ultimately translate into higher fuel prices if domestic supply remains constrained.