By Ben Ezeamalu
LAGOS (Reuters) -Nigeria’s Dangote refinery has suspended domestic sales of petrol in the local naira currency, citing unsustainable volumes that exceeded its crude allocations, according to a company memo to customers seen by Reuters.
The suspension, effective September 28, could complicate efforts to ease dollar demand in Africa’s largest economy, where fuel imports have long strained foreign reserves.
“Dangote Petroleum Refinery & 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 company said in the memo.
The refinery had been selling petrol in naira on the domestic market under a crude-for-naira swap arrangement with the Nigerian National Petroleum Company. The initiative was initially welcomed by the government as a way to reduce dollar pressure and support the naira.
However, Dangote’s growing exports – including shipments of fuel oil, naphtha, and diesel to Europe, West Africa and the United States – have raised questions about domestic supply priorities.
Customers with pending naira transactions were advised to formally request refunds, according to the memo.
The refinery did not immediately respond to a request for comment.
The suspension comes just days after Dangote laid off several Nigerian workers, according to sources familiar with the matter.
Nigeria is battling to bring down inflation running above 20% and to shore up a weakening currency, exacerbated by dollar shortages and subsidy reforms. Analysts say the decision to halt naira sales could push more marketers to source petrol in dollars, further pressuring the naira.
The 650,000-barrels-per-day refinery, Africa’s largest, was expected to transform Nigeria’s fuel landscape. But its domestic obligations and export ambitions are now under scrutiny.
(Reporting and Writing by Ben Ezeamalu; Editing by Emelia Sithole-Matarise)
