Dangote refinery, one of Nigeria’s major oil suppliers, has suspended the sale of petroleum in Naira, citing a currency mismatch that threatens to upend the entire sector.
The group stated that this decision was necessary to avoid a mismatch between its sales proceeds and crude oil purchase obligations, which are denominated in US dollars.
This suspension occurs against the backdrop of stalled negotiations for a naira-for-crude oil swap arrangement with the Nigerian National Petroleum Company Limited (NNPCL).
The deal was designed to provide domestic refineries, including Dangote Refinery, with crude oil in exchange for refined petroleum products.
However, its delayed implementation has compelled Dangote Refinery to resort to purchasing crude oil denominated in US dollars.
According to the refinery, the cumulative value of its sales of petroleum products denominated in Naira has significantly exceeded the aggregate value of the Naira-denominated crude oil allocations it has received.
The management disclosed this through a statement made available to newsmen on its social media handle on Wednesday.
The refinery’s decision is expected to last until it receives an allocation of Naira-denominated crude cargoes from the NNPC.
According to the statement, “We wish to inform you that, Dangote Petroleum Refinery has temporarily halted the sale of petroleum products in Naira. This decision is necessary to avoid a mismatch between our sales proceeds and our crude oil purchase obligations, which are currently denominated in U.S. dollars”
“To date, our sales of petroleum products in Naira have exceeded the value of Naira-denominated crude we have received. As a result, we must temporarily adjust our sales currency to align with our crude procurement currency”
“Our attention has also been drawn to reports on the internet claiming that we are stopping loading due to an incident of ticketing fraud. This is a malicious falsehood. Our systems are robust and we have had no fraud issues”
“We remain committed to serving the Nigerian market efficiently and sustainably. As soon as we receive an allocation of Naira-denominated crude cargoes from NNPC, we will promptly resume petroleum product sales in Naira”.
