Dangote Refinery Starts Dollar Sales Amid Oil Price Surge

Dangote Refinery has initiated the sale of Premium Motor Spirit (PMS) and diesel in U.S. dollars, a move that comes as global crude oil prices rise due to renewed tensions in the Middle East. Analysts indicate that this dollar-denominated sale could significantly impact fuel prices and foreign exchange demand in Nigeria.

The federal government aims to ensure that domestic fuel prices reflect international crude oil price movements. However, the Nigerian National Petroleum Company (NNPC) has struggled to provide sufficient naira-denominated crude oil, forcing the refinery to rely on international sources, which exposes it to exchange rate risks.

Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), noted that the decision to sell in dollars is a strategic response to manage exchange rate and commodity price risks amid volatile global oil markets.

This policy shift may exert additional pressure on Nigeria's foreign exchange market and could lead to higher pump prices for consumers.