Nigeria’s downstream petroleum sector has been thrown into fresh debate after Dangote Petroleum Refinery introduced the sale of petroleum products in United States dollars for selected transactions. The decision has been strongly opposed by independent petroleum marketers, industry associations, and several energy experts, who fear it could increase fuel prices, worsen foreign exchange challenges, and create instability in the country’s economy.
The refinery recently informed marketers that all previous payment documents issued in naira for coastal and gantry transactions were no longer valid. Going forward, payments for Premium Motor Spirit (petrol), Automotive Gas Oil (diesel), and aviation fuel under these transactions would be made in US dollars.
Following the announcement, fuel loading prices immediately increased at several private depots across Lagos, Port Harcourt, and Warri. Reports showed that petrol prices rose by as much as ₦113 per litre in some locations, while diesel prices increased by up to ₦150 per litre, raising concerns that motorists and businesses could soon face higher pump prices.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) criticised the policy, warning that allowing fuel sales in dollars could gradually push Nigeria toward a dollar-based economy. According to the association, petroleum products consumed within Nigeria should continue to be sold in naira, the country’s legal currency.
PETROAN President Billy Gillis-Harry acknowledged Dangote Refinery’s contribution to improving Nigeria’s fuel supply but argued that major business decisions should also consider the nation’s economic stability. He expressed concern that marketers would struggle to obtain enough foreign currency from banks to buy fuel, increasing operating costs and putting additional pressure on consumers.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) also called on President Bola Tinubu and relevant government agencies to urgently intervene. The association urged the Federal Government to continue the crude-for-naira arrangement, arguing that linking fuel sales directly to the dollar would increase exchange rate pressure and make petrol prices even more unstable.
According to IPMAN, fuel prices in Nigeria are already heavily influenced by international crude oil prices and the value of the naira against the dollar. Adding another layer of dollar-denominated transactions could increase demand for scarce foreign exchange and push fuel prices even higher.
However, not all industry experts oppose the refinery’s decision. Petroleum economist Professor Wumi Iledare explained that Dangote Refinery may simply be protecting itself against foreign exchange risks. Since crude oil and many refinery inputs are purchased in dollars, earning revenue in the same currency helps reduce financial losses caused by exchange rate fluctuations.
He added that in a deregulated market, companies are free to set their own selling prices, while competition and market forces determine whether buyers accept them. According to him, the refinery’s pricing decision should not automatically be seen as price fixing.
On the other hand, energy law expert Professor Dayo Ayoade argued that although crude oil is traded globally in dollars, petroleum products sold within Nigeria should ordinarily be priced in naira. He noted that the refinery had benefited from government support and foreign exchange assistance during its construction, making it important to balance commercial interests with national economic priorities.
Ayoade also called on regulators, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Central Bank of Nigeria (CBN), and the Federal Competition and Consumer Protection Commission (FCCPC), to carefully review the policy and determine whether it aligns with Nigeria’s financial and legal framework.
Industry analysts believe the controversy highlights the ongoing challenge of balancing private investment, market deregulation, consumer protection, and foreign exchange management. While Dangote Refinery remains a major contributor to Nigeria’s domestic fuel supply and has significantly reduced dependence on imported petroleum products, many stakeholders insist that local fuel sales should continue to be conducted in naira to protect businesses and consumers from additional economic pressure.
The Federal Government is now being urged to engage all stakeholders and find a solution that supports investment while maintaining stability in Nigeria’s petroleu
