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Business, Energy

Fuel Loading Halted at Dangote Over Dollar Sale Dispute, FG Steps In

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Petroleum marketers have slowed fuel purchases amid uncertainty over the Dangote Petroleum Refinery’s decision to adopt a dollar-based pricing model for petrol, raising concerns about possible disruptions in supply and higher pump prices. Industry operators said they were taking a cautious approach as they awaited clarity on the refinery’s new pricing template and the cost of imported petroleum products before committing to large-scale purchases. The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, said marketers were reluctant to buy large volumes because they could not predict whether petrol prices would rise or fall after making purchases. According to him, existing fuel stocks were purchased at prices between N1,250 and N1,300 per litre, while uncertainty over new crude supplies and imported products had made it difficult for marketers to determine future pricing. In the South-West, IPMAN said the situation had forced some marketers to suspend fresh purchases, while a number of filling stations temporarily closed after exhausting their stock. The association, however, maintained that there was no fuel scarcity and urged motorists not to engage in panic buying. Despite the concerns, a spokesperson for the Dangote Group dismissed reports that the refinery had suspended fuel loading, insisting that petroleum products were still being loaded at the Lekki facility and describing claims to the contrary as “fake news.” Meanwhile, discussions between the Federal Government and the Dangote Petroleum Refinery over the new pricing model are ongoing. According to a senior government official, the dispute centres on the continued issuance of fuel import licences and the volume of crude oil supplied to the refinery in naira. The Federal Competition and Consumer Protection Commission (FCCPC) reiterated that the naira remains the only legal tender for domestic commercial transactions and expressed concern that recent declines in global crude oil prices have yet to translate into lower pump prices for Nigerian consumers.

Banking, Business

CBN’s Cardoso Says Naira Should Compete, Not Be Shielded

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Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has said the naira should remain market-driven and competitive rather than being artificially supported, as the apex bank retained its benchmark interest rate and reaffirmed its commitment to reducing inflation to single digits. Cardoso made the remarks after the Monetary Policy Committee (MPC) meeting in Abuja on Tuesday, where the committee left the Monetary Policy Rate (MPR) unchanged at 26.5 per cent. His comments come weeks after the International Monetary Fund (IMF) said the naira remains undervalued despite recent gains against the United States dollar in both the official and parallel foreign exchange markets. The IMF estimated that the naira is trading about 25.6 per cent below its value based on Nigeria’s economic fundamentals, even after recent foreign exchange reforms introduced by the Federal Government. Responding to the assessment, Cardoso defended the CBN’s exchange-rate reforms, insisting that the bank remains committed to a transparent and liquid foreign exchange market where prices are determined by willing buyers and willing sellers. “Our focus is to sustain a transparent and liquid market driven by willing buyers and willing sellers. Nigeria needs a competitive currency whose value is determined by economic fundamentals such as stronger oil and non-oil exports, increased foreign direct investment, improved domestic productivity and lower import dependence,” he said. He added that the foreign exchange market has become more transparent, with daily turnover at times exceeding one billion dollars, reflecting growing confidence in the reforms introduced by the apex bank. Announcing the outcome of the MPC meeting, Cardoso said the committee retained the Monetary Policy Rate at 26.5 per cent, maintained the asymmetric corridor at +50/-450 basis points, kept the Cash Reserve Ratio (CRR) at 45 per cent for deposit money banks and 16 per cent for merchant banks, retained the 75 per cent CRR on non-Treasury Single Account public sector deposits, and left the liquidity ratio unchanged at 30 per cent. He explained that the decision followed a careful assessment of moderating domestic inflation and growing global uncertainties, particularly renewed tensions in the Middle East, which could trigger higher energy prices and increase inflationary pressures. According to Cardoso, headline inflation eased slightly to 15.91 per cent in June from 15.93 per cent in May, ending three consecutive months of increases. Core inflation also declined to 15.92 per cent from 16.82 per cent, supported largely by exchange-rate stability. However, he noted that food inflation rose to 17.52 per cent due to supply disruptions in major food-producing areas and higher transportation costs. He said the moderation in inflation suggests that the central bank’s monetary tightening measures are beginning to deliver results, despite external challenges. “We are pleased that inflation has moderated, albeit slightly. That gives us an indication that the tools we have implemented so far are beginning to produce results,” Cardoso said. He acknowledged that the conflict in the Middle East had slowed the pace of disinflation but reaffirmed the CBN’s determination to restore price stability. “We will do what is necessary to contain inflation and bring it down to single digits, which remains our target,” he added. The MPC projected that inflation would continue to ease over the medium term, supported by exchange-rate stability, the delayed effects of previous monetary tightening and improved food supply during the harvest season. It, however, warned that a prolonged escalation of the Middle East conflict remains a major risk to the outlook. Cardoso also highlighted improvements in key macroeconomic indicators, revealing that Nigeria’s gross external reserves increased to $52.52 billion as of July 17, up from $50.47 billion at the end of May, providing enough cover for about 11 months of imports. He further disclosed that the Purchasing Managers’ Index (PMI) returned to expansion territory at 50.1 in June, indicating improving business activity. The CBN governor stressed the need for stronger coordination between fiscal and monetary authorities to improve the effectiveness of policies aimed at controlling inflation, maintaining macroeconomic stability and supporting economic growth. Addressing concerns over reduced bank lending, Cardoso described the slowdown as temporary, attributing it to the withdrawal of COVID-19 regulatory forbearance, ongoing bank recapitalisation and loan portfolio restructuring. He expressed confidence that lending would recover as banks complete the transition. He also reassured Nigerians that all existing banknotes and coins remain legal tender, explaining that the reduced circulation of lower denominations is largely due to declining demand as digital payments become more widely adopted. According to him, the CBN will continue to promote financial inclusion through expanded digital payment systems and other initiatives aimed at increasing access to financial services across the country.

Banking, Economy

CBN Leaves Interest Rate Unchanged at 26.5%

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The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) has retained the benchmark Monetary Policy Rate (MPR) at 26.5 per cent for the second consecutive meeting. CBN Governor Olayemi Cardoso announced the decision on Tuesday at the end of the committee’s 306th meeting in Abuja. According to Cardoso, the committee resolved to maintain the MPR at 26.5 per cent. The decision comes after the MPC also held the rate at its previous meeting, following a 50-basis-point reduction announced in February 2026.

Business, Energy

Sahara Group Hosts Asharami Square 3.0 to Advance Africa’s Energy Future

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Sahara Group will convene policymakers, investors, industry leaders, and energy experts for the third edition of Asharami Square, its thought leadership platform focused on advancing discussions on Africa’s energy future. According to a statement by the company, the event, themed “Energising Africa’s Future: Legacy, Impact, and Transformation,” will feature a panel comprising Professor Abigail Ogwezzy-Ndisika, Director of the Institute of Continuing Education, University of Lagos; Temitope George, Chief Executive Officer of the Lagos State Electricity Regulatory Commission (LASERC); Adebiyi Olusolape, Associate Editor, Africa, Argus Media; and Kemi Awodein, Managing Director, Investment Banking, Chapel Hill Denham. The event will explore how collaboration among governments, industry, financial institutions, academia, and the media can help unlock investment, strengthen energy infrastructure, and expand access to electricity while supporting Africa’s energy transition. A major highlight of the event will be the unveiling of the judging panel for the newly launched Asharami Square Energy Reporting Fellowship, an initiative designed to promote credible and solutions-focused journalism on Africa’s energy sector. Speaking ahead of the event, Sahara Group’s Head of Corporate Communications, Bethel Obioma, said the platform was created to encourage conversations that translate into practical outcomes. “Africa’s energy future will be shaped by the strength of our partnerships and our ability to turn dialogue into action,” Obioma said. She added that the company remains committed to investing in ideas, partnerships, and platforms that will contribute to a sustainable energy future for the continent. Also speaking, Sahara Group’s Director of Governance and Sustainability, Ejiro Gray, said Africa’s energy transition should be driven by solutions tailored to the continent’s realities. “Africa’s energy transition must be defined by solutions that reflect our unique realities,” Gray said, adding that Asharami Square helps bridge technical expertise and public understanding by promoting evidence-based discussions on energy, sustainability, and development. The programme will open with a keynote address by Sadiq Wanka, Special Adviser to the President on Power Infrastructure, who is expected to outline the Federal Government’s policy direction and infrastructure priorities for expanding energy access. A panel discussion will follow, focusing on financing gaps, regulatory reforms, data-driven decision-making, and the role of the media in improving public understanding of Africa’s energy transition. Since its launch in 2024, Asharami Square has served as a platform for dialogue on energy transition and sustainability across Africa. Sahara Group said the introduction of the Energy Reporting Fellowship is intended to support the development of journalists with specialised knowledge of the energy sector.

Banking, Business

CBN confirms Accountant-General directed opening of PFIPC accounts

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The Central Bank of Nigeria (CBN) has confirmed that it opened two domiciliary accounts linked to the controversial Presidential Foreign Investment Promotion Council (PFIPC) following a directive from the Office of the Accountant-General of the Federation (OAGF), but maintained that the accounts were never funded or used. The disclosure was made on Monday by the CBN’s Director of Banking Services, Abdullahi Hamisu, while appearing before the House of Representatives Ad Hoc Committee investigating the legal basis, operations and budgetary allocation of the PFIPC, including the N1.3 billion allocated to the council in the 2026 Appropriation Act. Representing CBN Governor Olayemi Cardoso, Hamisu told the committee that the apex bank received a formal directive dated July 29, 2025, from the Office of the Accountant-General instructing it to open two domiciliary accounts for the Presidential Economic Advisory Council/Presidential Foreign Investment Promotion Council. He said one account was denominated in United States dollars while the other was in British pounds sterling, adding that both were opened after the bank completed its standard account-opening procedures. Hamisu, however, stated that the accounts remained dormant throughout their existence and were never funded or used for any financial transactions. Addressing questions from lawmakers on whether the CBN requested evidence of an enabling law establishing the council before opening the accounts, he said the bank acted on the directive from the Office of the Accountant-General. “We don’t ask for an enabling Act. We received a mandate from the Office of the Accountant-General of the Federation to open the accounts for the council,” Hamisu told the committee. The development comes amid conflicting claims by government institutions over the existence and operations of the PFIPC. On July 1, the Presidency alleged that Adeniyi Adeyemi, who claims to be the Director-General of the council, used forged documents to facilitate the opening of a CBN account after allegedly misleading the Office of the Accountant-General. In a statement issued by the Special Adviser to the President on Information and Strategy, Bayo Onanuga, the Presidency also alleged that police investigations uncovered 34 bank accounts linked to Adeyemi, including nine accounts opened in the names of entities described as fictitious agencies. However, the Office of the Accountant-General has maintained that the PFIPC has no operational account with the CBN. Its Director of Public Relations, Bawa Mokwa, said that while an application to open an account was initiated, the process was not completed because the required documentation needed to activate the account was never submitted. The controversy surrounding the PFIPC intensified in June after the Presidency distanced itself from the council, insisting that no such body exists under the administration of President Bola Tinubu despite the council receiving a budgetary allocation in the 2026 Appropriation Act, occupying an office within the Federal Secretariat and reportedly recruiting about 300 staff members. Chief of Staff to the President, Femi Gbajabiamila, also denied appointing Adeyemi as Director-General of the council. Adeyemi has continued to insist that his appointment was legitimate and has called on President Tinubu to establish an independent panel to investigate the controversy surrounding the PFIPC.

Business, Energy

FG Seeks Investors’ Backing for N729bn Power Bond to Clear Gencos’ Debt

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The Federal Government is preparing to issue a second bond valued at about N729 billion under the Presidential Power Sector Debt Reduction Programme (PPSDRP) as part of efforts to settle verified legacy debts owed to electricity Generation Companies (Gencos) and improve liquidity in the Nigerian Electricity Supply Industry (NESI). Ahead of the bond issuance, the government will host an investors’ forum on Tuesday, July 21, to engage prospective investors and provide details of the transaction. The planned issuance follows the successful launch of a N501 billion bond in January 2026. Combined, the two bonds will raise approximately N1.23 trillion, completing the first phase of the N4 trillion debt reduction programme approved by President Bola Tinubu to address long-standing financial obligations in the power sector. In a statement issued in Abuja, the Nigerian Bulk Electricity Trading Plc (NBET) disclosed that the first coupon payment and principal repayment on the January bond, which matured on July 14, were settled in full and on schedule. According to NBET, the timely repayment reflects the Federal Government’s commitment to honouring its financial obligations while reinforcing investor confidence in the programme. The agency explained that the N1.23 trillion to be raised through the first two bond issuances represents Series 1 and Series 2 of the Capital Market Multi-Instrument Issuance Programme, which forms the opening phase of the broader N4 trillion initiative. NBET noted that the January bond demonstrated the government’s market-driven and fiscally responsible approach to clearing verified debts owed to Gencos, improving liquidity and supporting the long-term sustainability of the electricity market. Speaking on the planned issuance, NBET Managing Director and Chief Executive Officer, Johnson Akinnawo, described the second bond as another significant milestone in the government’s efforts to restore financial stability and investor confidence in the power sector. He said the issuance underscores the government’s commitment to resolving verified legacy obligations through a transparent, structured and market-based financing mechanism. Akinnawo added that strengthening liquidity across the electricity value chain would improve the financial health of industry participants, encourage fresh investments and support sustainable power generation. He recalled that the Federal Executive Council (FEC) approved the establishment of the N4 trillion Presidential Power Sector Debt Reduction Programme in 2025, with NBET designated as the sponsoring institution responsible for settling verified legacy debts. According to him, the programme will be implemented through multiple debt issuances by NBET Finance Company Plc, a special purpose vehicle established for the initiative. He further explained that the debt instruments are backed by the full faith and credit of the Federal Government and supported by a comprehensive risk mitigation framework to ensure successful execution. Akinnawo said the proposed N729 billion bond represents another key step towards resolving long-standing liabilities in the electricity sector and creating a more stable, bankable and investment-friendly electricity market. He maintained that improving liquidity across the power value chain would strengthen market participants, attract new investment and promote sustainable electricity generation for the benefit of Nigerians.

Banking, Business

CBN Reforms Lift Market Capitalization of GTCO, Zenith, 10 Other Banks to N25.6tn

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Investor confidence in Nigeria’s banking sector has continued to strengthen following the Central Bank of Nigeria’s (CBN) reform measures, driving the combined market capitalization of 12 listed deposit money banks to N25.6 trillion as of July 17, 2026. The figure represents an increase of N9.45 trillion, or 58.6 per cent, from N16.12 trillion recorded at the end of December 2025. The banking sector’s impressive performance has been underpinned by key CBN reforms, including the ongoing bank recapitalization exercise, improved foreign exchange stability, tighter monetary policy and enhanced corporate governance standards. With the Nigerian Exchange Limited (NGX) recording a total market capitalization of N157.06 trillion as of July 17, 2026, the 12 listed banks accounted for about 16.3 per cent of the market’s value. The banks include Access Holdings Plc, First Holdco Plc, Ecobank Transnational Incorporated (ETI), Guaranty Trust Holding Company (GTCO), Zenith Bank Plc, United Bank for Africa (UBA), Fidelity Bank Plc, Sterling Financial Holdings Company Plc, Wema Bank Plc, FCMB Group Plc, Stanbic IBTC Holdings Plc and Jaiz Bank Plc. GTCO retained its position as the most valuable banking stock on the NGX with a market capitalization of N4.72 trillion, up from N3.3 trillion in 2025. Zenith Bank followed closely with N4.68 trillion, compared to N2.54 trillion a year earlier, while First Holdco’s market value more than doubled to N4.36 trillion from N2.01 trillion. Stanbic IBTC Holdings and UBA also crossed the N2 trillion market capitalization mark, with valuations of N2.65 trillion and N2.01 trillion, respectively. Among the N1 trillion category, ETI’s market capitalisation climbed from N994.34 billion to N1.56 trillion, while Fidelity Bank rose from N954.03 billion to N1.38 trillion. Access Holdings increased from N1.12 trillion to N1.37 trillion, while Wema Bank’s valuation surged from N818.43 billion to N1.22 trillion. The gains have also been reflected in share price performance. GTCO’s stock has appreciated by 42.45 per cent year-to-date to close at N129.20 per share, while Zenith Bank recorded an 84.47 per cent year-to-date gain. First Holdco’s share price advanced by 100.31 per cent, supported by strong 2025 full-year results and first-quarter 2026 earnings. Market analysts attribute the sustained rally to the CBN’s recapitalisation policy introduced in March 2024, which required commercial banks with international licences to maintain a minimum capital base of N500 billion, while banks with national and regional licences were mandated to hold N200 billion and N50 billion, respectively. The recapitalisation drive was further supported by NGX Invest, the Exchange’s digital platform that simplified public offer and rights issue subscriptions, enabling banks to raise fresh capital more efficiently and attracting greater investor participation. Commenting on the sector’s performance, Vice President of Highcap Securities Limited, David Adonri, said the banking industry has remained one of the strongest-performing sectors on the NGX, with the recapitalization programme significantly boosting investor demand for bank stocks. According to him, banks have continued to post strong market performance, with several capital-raising exercises heavily oversubscribed. He noted that ETI, Jaiz Bank, Wema Bank, First Holdco and Stanbic IBTC Holdings have recorded some of the strongest share price gains in 2026, reflecting sustained investor confidence in the sector’s growth prospects and financial stability.

Business, Energy

Lagos Energy Reforms to Reshape Facility Management, Spur Sustainable Growth

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The International Facility Management Association (IFMA), Nigeria Chapter, has announced a range of strategic initiatives aimed at boosting professional capacity, driving industry research and preparing facility managers for Nigeria’s changing energy landscape. The plans were unveiled at the IFMA Corporate Membership event, themed “Evaluating the Impact of New Energy Regulations on Facility Management, The Lagos State Example.” The association also reaffirmed its commitment to strengthening collaboration with government and private sector stakeholders to build a more resilient and future-ready facility management industry. Among the key initiatives are the establishment of an IFMA Learning and Innovation Centre, the creation of a Research and Development Platform, the launch of an industry Talent Bank, and expanded partnerships to address the country’s facility management skills gap through Technical and Vocational Education and Training (TVET). Speaking at the event, IFMA Nigeria President, Sheriff Daramola, said the association is focused on building an ecosystem that equips professionals with the knowledge, technology and practical skills needed to meet the evolving demands of the industry. According to him, the proposed Learning and Innovation Centre will serve as a hub for training, certification, innovation and corporate collaboration. He added that the Talent Bank will connect employers with verified professionals to improve recruitment and tackle industry-wide skills shortages, while the Research and Development Platform will promote practical, data-driven solutions in areas such as energy efficiency, workplace experience, asset performance, facility management technology and financing. Delivering the keynote address, Lagos State Commissioner for Energy and Mineral Resources, Biodun Ogunleye, said the state’s ongoing electricity sector reforms present significant opportunities for facility managers to play a more strategic role in developing sustainable, efficient and resilient infrastructure. He noted that the Lagos State Electricity Law, alongside the establishment of key institutions including the Lagos State Electricity Regulatory Commission (LASERC), the Lagos Independent System Operator (LAISO) and the Lagos State Electrification Agency (LSEA), has created the foundation for a competitive electricity market that promotes investment, innovation and a more reliable power supply.

Business, Energy, Politics

NUPRC Rebuilds Investor Confidence in Nigeria’s Oil Industry

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Six months into her tenure as Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mrs. Oritsemeyiwa Eyesan is driving reforms aimed at strengthening regulatory certainty, improving operational efficiency, accelerating decision-making, and enhancing transparency. The early results are becoming increasingly visible, with higher oil production, renewed investor confidence, and stronger interest in Nigeria’s licensing regime. The 2025 licensing round recorded encouraging participation, attracting not only indigenous oil companies but also major international oil companies (IOCs) and, for the first time, significant interest from international independent operators. The development is seen as a sign of growing confidence in Nigeria’s upstream sector. Speaking on the outcome, Eyesan said the level of participation reflects renewed faith in the industry. “The level of participation tells me people have faith in the industry. Not just Nigerian companies, but IOCs and international independents. That is a signal. The question now is whether we build on it, and that depends entirely on whether the regulatory environment continues to move in the direction we have set,” she said. Nigeria’s upstream performance has also improved significantly. In June 2026, combined crude oil and condensate production reached 1.735 million barrels per day (bpd), exceeding the Organisation of Petroleum Exporting Countries (OPEC) production quota of 1.5 million bpd by four per cent. It also marked the country’s highest crude output since April 2020. Production has risen steadily throughout the year, climbing from 1.62 million bpd in January to 1.48 million in February, 1.54 million in March, 1.66 million in April, 1.7 million in May, and 1.735 million bpd in June. According to the commission, the increase was driven by improved operational stability, completed maintenance activities, and the absence of major infrastructure disruptions. Gas production also recorded gains, reaching 7.93 billion cubic feet (bcf) per day, up from 7.88 bcf/d in May 2025. Non-associated gas production slightly exceeded associated gas for the first time, reflecting increased investment in dedicated gas projects. Domestic gas supply rose to a record 2.18 bcf per day, while gas flaring declined to 0.57 bcf/d, representing 6.9 per cent of total production, in line with Nigeria’s target of ending routine gas flaring by 2030. Eyesan said the increase in domestic gas supply demonstrates that the sector is delivering greater value to Nigerians. “This is not only a production story. It is a story about an industry beginning to serve the country, it sits inside more gas reaching Nigerian homes, Nigerian industry and Nigerian power. The numbers matter. What they represent matters more,” she said. Before joining the commission, Eyesan spent three decades at the Nigerian National Petroleum Company (NNPC), where she held several senior positions, including Executive Vice President, Upstream, and Chief Strategy and Sustainability Officer. She also led efforts that doubled NNPC subsidiary production from 150,000 to 300,000 barrels per day and played a key role in resolving the long-running Production Sharing Contract (PSC) dispute. Upon assuming office, she identified three key priorities for the commission: increasing production and revenue, improving regulatory efficiency and predictability, and promoting safe, transparent and sustainable operations. To strengthen engagement with industry players, the commission established the Chief Executive Operators Leadership Forum, bringing together the NNPC, Oil Producers Trade Section (OPTS), Independent Petroleum Producers Group (IPPG) and other stakeholders every month to address production challenges, approval timelines and infrastructure integrity. The commission has also accelerated the digitisation of its operations, covering correspondence, permits, reporting systems and financial processes, while introducing a 90-day programme to fast-track field development plans, well interventions and rig mobilisation. In March, NUPRC signed the PEL5 agreement with SeaSeis Geophysical Limited and TGS to conduct broadband 3D seismic acquisition across 11,700 square kilometres offshore the Eastern Niger Delta. The project is expected to improve exploration decisions by providing higher-quality geological data. According to Eyesan, improved data quality is essential to attracting new investment. “Exploration is fundamentally driven by confidence in data and processes. PEL5 is about ensuring that the subsurface case for Nigeria’s offshore acreage is made as compellingly as it can be and that investors have the data quality they need to make decisions with confidence,” she said. The commission is also working to reduce regulatory bottlenecks by collaborating with the Nigerian Nuclear Regulatory Authority to create a single-window reporting system, eliminating duplicate compliance requirements for operators. “When you have multiple laws, you will likely have higher costs because each law comes with its own fees and charges. The only way to safeguard investments is to reduce the cost of operating here,” Eyesan noted. The National Bureau of Statistics (NBS) recently commended the commission for improving transparency in oil and gas data, with Statistician-General Adeyemi Adeniran highlighting the importance of NUPRC’s data in compiling Nigeria’s Gross Domestic Product (GDP). Looking ahead, the commission remains focused on achieving the Federal Government’s target of producing two million barrels per day by 2027 and three million barrels daily by 2030. Eyesan described the goal as an engineering and investment challenge that requires international expertise alongside local capacity. “We are rushing against time. If we are serious about ramping up production, we cannot rely solely on in-country resources. We need to bring in people who have done this at scale internationally and be honest about whether our processes are designed to attract them,” she said. The commission plans to expand international independent participation in future licensing rounds, particularly for deepwater projects that require significant technical expertise and investment. As part of its climate commitments, NUPRC has directed upstream operators to adopt measurement-based methane and greenhouse gas reporting by January 2027, replacing estimation-based reporting with verified emissions data in line with Nigeria’s net-zero target by 2060 and methane reduction goals. The commission is also finalising service-level agreements that will establish publicly available timelines for regulatory approvals, strengthening accountability and investor confidence. Eyesan believes developing skilled manpower remains critical to sustaining long-term growth in the industry. She noted that investment declines following the Petroleum Industry Act slowed talent development across the sector, stressing that rebuilding technical capacity will be essential to achieving

Business, Economy

The Rise of Dollar Denominated Petrol

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The federal government’s naira-for-crude policy appears to be facing a major setback following Dangote Petroleum Refinery’s decision to begin selling petroleum products in US dollars, a move that could have far-reaching implications for fuel prices, inflation, transport costs and the value of the naira. Rather than being viewed as a routine commercial decision, the refinery’s move is widely seen as a sign of the government’s inability to sustain the much-publicised naira-for-crude initiative. It also highlights the continued vulnerability of Nigeria’s domestic fuel market to fluctuations in the foreign exchange market, despite the country’s growing refining capacity. Effective July 13, 2026, Dangote Refinery fixed the ex-depot price of Premium Motor Spirit (PMS) at $0.779 per litre, diesel at $1.087 per litre, and aviation fuel at $0.942 per litre. The company also cancelled all previously issued invoices denominated in naira. The decision followed the refinery’s increasing reliance on crude oil purchased in dollars after supplies under the federal government’s naira-for-crude arrangement reportedly became insufficient. Dangote Refinery, a $20 billion investment and the world’s largest single-train refinery, has a refining capacity of 650,000 barrels per day, enough to meet Nigeria’s domestic fuel demand while exporting surplus refined products across Africa. However, industry reports indicate that the refinery received only seven domestic crude cargoes in May, far below its monthly requirement of between 13 and 15 cargoes. The shortfall forced the company to import a significant portion of its crude feedstock in dollars, exposing it to exchange-rate risks. At the current official exchange rate of about N1,380 to one US dollar, the refinery’s new PMS price translates to approximately N1,075 per litre before transportation costs, depot margins, regulatory charges and marketers’ profits are added. Although the immediate impact on pump prices may appear limited, analysts say the bigger concern is that petrol prices are now directly linked to movements in the foreign exchange market. For instance, if the exchange rate weakens to N1,500/$, the base cost of petrol would rise to about N1,169 per litre before additional charges. At N1,600/$, the cost would increase further to roughly N1,246 per litre. This means Nigerians could face higher fuel prices even if global crude oil prices and refining costs remain unchanged, simply because of a weaker naira. Ironically, this is the exact scenario the naira-for-crude initiative was designed to prevent. Introduced in 2024, the policy aimed to supply domestic refiners with crude oil in naira in order to reduce demand for foreign exchange, strengthen local refining, conserve foreign reserves and stabilise domestic fuel prices. Industry observers now argue that inconsistent implementation has significantly weakened those objectives. Professor Emeritus of Petroleum Economics, Wumi Iledare, said Dangote Refinery had simply announced the price at which it was willing to sell its products in a deregulated market. According to him, aligning revenues with the same currency used to purchase crude oil is a commercially sound response to foreign exchange exposure rather than an attempt to fix prices. While acknowledging the economic logic behind the decision, Iledare noted that Nigeria’s downstream petroleum market is still far from fully competitive. With state-owned refineries yet to operate at optimal capacity and imported fuel remaining expensive, Dangote Refinery has emerged as the country’s dominant supplier. As a result, a pricing decision by a single refinery can quickly have nationwide economic consequences. Industry stakeholders have also expressed concern over the development. The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) warned that conducting fuel transactions in dollars could encourage the gradual dollarisation of the Nigerian economy. Similarly, the Independent Petroleum Marketers Association of Nigeria (IPMAN) cautioned that marketers would now have to compete for scarce foreign exchange, increasing pressure on the naira and exposing fuel prices to greater volatility. Reports also indicate that some depot operators have already increased loading prices by as much as N113 per litre in anticipation of higher replacement costs. The implications could extend beyond the petroleum sector. According to the National Bureau of Statistics (NBS), Nigeria’s headline inflation stood at 15.93 per cent in May 2026, while food inflation was 16.96 per cent. Fuel remains one of the country’s biggest inflation drivers because road transport accounts for the movement of most goods and passengers across the country. In addition, thousands of manufacturers, hospitals, schools and small businesses continue to rely on petrol and diesel-powered generators due to unreliable electricity supply. Consequently, any sustained increase in fuel prices is expected to push up transportation costs, food prices, production expenses and the overall cost of living. The latest development has also exposed what many analysts describe as a contradiction in the government’s energy reform agenda. The federal government promoted the naira-for-crude policy as a key strategy for reducing pressure on foreign exchange, strengthening energy security and stabilising domestic fuel prices. However, it failed to ensure the consistent supply of crude oil to local refiners in naira, a condition widely regarded as essential to the policy’s success. Once refiners were forced to source more crude in dollars, Dangote Refinery’s decision to switch to dollar-denominated sales became a commercial necessity rather than a voluntary choice. Ultimately, the refinery has acted in line with standard business practice by matching its revenue with the currency in which most of its costs are incurred. Analysts argue that the larger issue lies not with the refinery’s decision but with the policy inconsistencies that made it unavoidable. Unless the federal government urgently restores a transparent and reliable framework for supplying crude oil to domestic refiners in naira, experts warn that local refining alone may not guarantee lower fuel prices. Instead, the cost of petrol at filling stations could increasingly depend less on refining activities in Lekki and more on fluctuations in the value of the naira against the US dollar.