Onome Amuge
Nigerians may soon face another round of petrol price hikes as the $20 billion Dangote Petroleum Refinery announced it will suspend sales of Premium Motor Spirit (PMS) in Naira starting Sunday, September 28, 2025.
The Lagos-based refinery, which has become a major supplier of petrol to the domestic market since it commenced operations, said it has exhausted its crude-for-Naira allocation from the federal government, forcing it to revert to dollar-denominated transactions.
The development threatens to upend months of relative price stability in the downstream sector, where the federal government’s crude-for-Naira initiative has kept pump prices below N1,000 per litre. Analysts warn that unless the government swiftly intervenes with new allocations, consumers could see prices rise well above current levels in the coming weeks.
In a notice issued to customers and signed by its Group Commercial Operations unit, Dangote Refinery explained the decision.
“We write to inform you that Dangote Petroleum Refinery and Petrochemicals has been selling petroleum products in excess of our Naira-crude allocations and, consequently, we are unable to sustain PMS sales in Naira going forward,” the statement read.
It added that:
“Kindly note that this suspension of Naira sales for PMS will be effective Sunday, September 28, 2025. We will provide further updates regarding the resumption of supply once the situation has been resolved. All customers with PMS transactions in Naira who would like a refund of their current payments should formally request the processing of their refund.”
The refinery, which sources crude oil both domestically and through imports, has relied on the government’s special allocation to ease pressure on the foreign exchange market and maintain affordability of petroleum products. Without access to subsidised crude in Naira, refiners like Dangote will be forced to import crude in dollars, a shift that could have cascading effects on retail pump prices.
Industry stakeholders told Business a.m that the suspension could create immediate supply chain jitters, particularly as independent marketers and depot owners adjust to new pricing models denominated in foreign exchange. “If Dangote Refinery switches fully to dollar sales, marketers will have no choice but to pass on the cost to consumers. This could push petrol prices into uncharted territory,” one downstream operator said.
For the federal government, the crisis presents a fresh dilemma over whether to extend more Naira-based crude allocations at a fiscal cost or allow market forces to determine prices at a time inflation is already at multi-decade highs.
The Dangote Refinery has positioned itself as a cornerstone of Nigeria’s energy self-sufficiency agenda, with the capacity to produce 650,000 barrels per day of refined products when fully operational. However, the latest development highlights the fragility of that ambition in the absence of consistent policy support.
As Nigerians brace for potential pump price adjustments, economists warn that a hike in petrol prices could trigger another round of inflationary pressures, worsening living costs for households and businesses already squeezed by currency volatility and high food prices.
