Marketers Face Rising FX Burden As Dangote Refinery Adopts Dollar Pricing

Marketers Face Rising FX Burden as Dangote Refinery Adopts Dollar Pricing Petroleum marketers in Nigeria could require an estimated $1.84 billion every month to purchase petrol, diesel and aviation fuel from the Dangote Petroleum Refinery following the company’s decision to price refined petroleum products in U.S. dollars. The development is expected to increase demand for foreign exchange and could influence fuel prices across the country. Industry analysts say the new pricing model transfers foreign exchange risks from the refinery to fuel marketers, who earn revenue in naira but must now source dollars to buy petroleum products. They warn that fluctuations in the exchange rate could make fuel prices more volatile and place additional pressure on marketers’ operating costs. Reports indicate that depot prices for petrol have already increased by more than ₦100 per litre at some loading points following the policy change. Diesel prices have also recorded increases, raising concerns about the wider impact on transportation, logistics and the overall cost of living. The refinery’s move comes amid challenges in sourcing sufficient domestic crude under Nigeria’s naira-for-crude arrangement and higher international crude oil prices. While the policy may reduce the refinery’s exposure to currency losses, stakeholders say its success will depend on the availability of foreign exchange and the ability of marketers to manage the higher financing requirements without passing excessive costs on to consumers.