Industry experts have defended Dangote Refinery’s decision to sell petroleum products in US dollars, describing the move as a reflection of current market realities and a necessary step to safeguard the refinery’s commercial operations.
The experts said concerns over the policy should focus less on the currency used for transactions and more on addressing Nigeria’s exchange rate volatility and ensuring adequate domestic crude oil supply.
Economic analyst Wilson Agaba said marketers would now have to source foreign exchange or pay the naira equivalent to purchase fuel from the refinery, warning that a weaker naira could push pump prices higher.
He explained that the original arrangement was for the Federal Government to supply crude oil to the refinery in naira, with refined products also sold locally in naira.
However, the refinery’s increasing dependence on imported crude has made dollar-based pricing unavoidable due to the associated costs of shipping, logistics and financing.
Agaba noted that the refinery, built with about $20 billion in financing, must meet its debt obligations, cover operating expenses and generate returns for investors. He added that the company should not be criticised for protecting its commercial interests, stressing that it contributes significantly to Nigeria’s economy through employment, tax revenue, foreign exchange earnings and improved energy security.
Emeritus Professor of Petroleum Economics and Principal Facilitator at the FULRE Energy Business School, Prof. Wumi Iledare, said the major issue is achieving energy security rather than the currency used for pricing petroleum products.
According to him, crude oil is traded globally in US dollars, and stable exchange rates would help lower fuel prices even when products are priced in dollars. He called on the government to stabilise the naira, increase domestic crude supply, promote competition and improve pipeline and rail infrastructure to reduce transportation costs.
Similarly, the President and Chief Executive Officer of Rock Global Investment Network said Dangote Refinery has strengthened Nigeria’s energy security and should be encouraged. He added that expanding local refining capacity would reduce dependence on imported petroleum products and attract more private investment into the downstream oil sector. Visit www.jocomms.com for more news.
