Dangote Refinery Dumps Naira Pricing as Crude Shortages Bite

Gasoline now trades at $0.779 per liter, while diesel and jet fuel sit at $1.087 and $0.942 respectively. Although marketers will settle these amounts in naira, the underlying benchmark is now tethered to the greenback. This move effectively passes the volatility of Nigeria’s foreign exchange market directly onto domestic wholesale fuel prices, ending the refinery’s months-long strategy of absorbing the cost differential.

The shift highlights the collapse of the government’s 2024 naira-for-crude initiative, which was intended to insulate the domestic economy from dollar dependence. Despite Nigeria exporting over 1 million barrels of crude daily, the state supplier provided only seven cargoes in May. Consequently, the refinery has been forced to source the remainder of its feedstock on the international market, where global pricing dictates terms. While the refinery has successfully curtailed decades of reliance on imported gasoline, it remains trapped in a paradox: the nation has the capacity to refine its own fuel but lacks the domestic supply chain to feed its most significant industrial asset.