Dangote Petroleum Refinery has switched to US dollar for payment for Premium Motor Spirit (PMS), Automotive Gas Oil (AGO), and Aviation Turbine Kerosene (ATK).
The company’s new policy, which took effect immediately, applies to both gantry and coastal product sales.
Industry sources familiar with the refinery’s operations said the decision was driven by increasing foreign exchange exposure arising from the refinery’s crude procurement structure and persistent volatility in the foreign exchange market.
A senior industry source said the refinery is now receiving a larger proportion of its crude oil supplies from the Nigerian National Petroleum Company Limited under dollar-denominated arrangements, while a substantial volume of its refined products has continued to be sold in naira.
The source explained that the growing mismatch between dollar-based crude purchases and naira-denominated product sales had exposed the refinery to significant exchange rate risks, making the transition to dollar-based product sales necessary.
“The decision takes effect immediately. All PMS, AGO and ATK sales, both gantry and coastal, are now dollar-based,” the source said.
It was further gathered that a memo to this effect had been sent to marketers lifting fuel from the refinery.
An official further noted that continued fluctuations in international crude oil prices and uncertainty in Nigeria’s foreign exchange market also influenced the refinery’s decision.
The source said the refinery now receives fewer crude cargoes priced in naira compared with those priced in dollars, while a larger share of its petroleum products has been sold locally in naira.
“While we require more than 15 cargoes of crude monthly for our operations, the NNPCL is struggling to supply three cargos in Naira under the naira-for-crude arrangement,” an official said.
Market analysts believe the policy could have significant implications for fuel pricing, distribution costs and foreign exchange demand, especially as Dangote Refinery remains one of the country’s largest suppliers of refined petroleum products.
