Naira Under Pressure As Fuel Depots Adjust To Dollar Regime

 

Fuel marketers have resumed lifting petrol and diesel from private depots across the country after nearly a week of disrupted loading, even as ex depot prices climbed again in Lagos and moved unevenly in other coastal hubs, signalling that the volatility unleashed by Dangote Petroleum Refinery’s shift to dollar pricing is far from over.

The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, confirmed the resumption, saying private depots had returned to selling products and playing down fears of an imminent scarcity. According to him, the brief halt was a matter of caution rather than shortage, driven by rapid price movements in a market still absorbing the refinery’s new commercial template and the pressures of the wider crisis in the Middle East.

Ukadike explained that depot owners temporarily suspended loading to reset their prices and demand top up payments from marketers who had already paid for stock before the latest increase. He noted, in a market where prices are moving in one direction more often than the other, that depot owners do not refund marketers when rates fall below what was previously paid. “Once there is a price change, they will stop and take their stock, then reset their prices,” he said, describing the top up as the differential between the old and current prices that marketers must settle before they can load.

On whether marketers had begun paying in dollars for products lifted from the refinery’s gantry in Lekki, the IPMAN spokesman said he could not confirm it. He drew a distinction between gantry transactions, which he was unsure about, and offshore or coastal loading, which he said would definitely be settled in dollars.

That uncertainty traces directly to the refinery’s decision, effective Monday, July 13, 2026, to end naira denominated sales of petrol, diesel and aviation fuel and price them in United States dollars. In a notice to marketers signed by its Group Commercial Operations department, the refinery pegged Premium Motor Spirit at 0.779 dollars per litre, Automotive Gas Oil at 1.087 dollars per litre and aviation fuel at 0.942 dollars per litre, while coastal petrol supplies were fixed at 1,044.62 dollars per metric tonne. Liquefied Petroleum Gas, popularly known as cooking gas, was exempted from the arrangement. The refinery declared all previously issued naira Proforma Invoices and Deal Recaps invalid, instructing that no payments be made against them.

The move reverses the naira for crude framework that took effect on October 1, 2024, under which local refiners bought crude in naira and sold refined products in the same currency, shielding the downstream sector from foreign exchange swings. Industry sources attributed the reversal to a widening mismatch between the dollars the refinery needs to buy crude and the naira it was receiving for its products, at a time when dollar liquidity remains tight. Only days before the switch, on July 2, the refinery had cut its ex depot petrol price by 50 naira to 1,075 naira per litre, its fourth reduction within a month, underscoring how sharply the pricing logic has now turned.

The pass through to depot gates was immediate. Data from industry monitor PetroleumPriceNG showed several depots raising ex depot petrol prices by more than nine per cent in the days after the announcement, with quotes such as 1,141 naira at Optima, 1,230 naira at Matrix Warri, 1,170 naira at Rainoil Delta and 1,121 naira at AITEO. Reported increases reached as high as 113 naira per litre on petrol and 150 naira per litre on diesel at some locations.

By Tuesday, the climb had continued in Lagos. African Terminal, ASCON, Gulf Treasure, Integrated, Matrix, NIPCO, Pinnacle, Sahara and T.Time all lifted their ex depot petrol price by 25 naira to 1,275 naira per litre. Elsewhere the picture was mixed. In Port Harcourt, Bulk Strategic and Masters held at 1,265 naira, while Matrix trimmed its price by 15 naira and Liquid Bulk shaved off three naira to land at the same 1,265 naira level. In Calabar, Hong Petroleum dropped its rate by 15 naira to 1,255 naira even as Sobaz added 10 naira to reach 1,265 naira. In Warri, Optima moved up to 1,270 naira and Matrix edged higher to 1,265 naira.

Diesel followed a similar upward drift. In Lagos, African Terminal, Duport, Gulf Treasure, Ibachem and Wosbab each added 10 naira to sell at 1,600 naira per litre, while Integrated quoted the same figure and Ibeto held at 1,590 naira. In Port Harcourt, Sigmund raised its diesel price by five naira to 1,620 naira and Sahara sold at 1,600 naira, while in Warri, Prudent lifted its rate to 1,610 naira and NIPCO retained a higher 1,680 naira.

The dollar pivot lands on an already strained currency. At the official Nigerian Foreign Exchange Market, the naira traded at about 1,380 naira to the dollar this week, with the volume weighted average put at 1,380.18 naira on the latest session, while the parallel market quoted the greenback between 1,410 and 1,425 naira. Market commentary cited by the Central Bank of Nigeria’s reporting has linked part of the recent pressure on the naira to fresh dollar demand from petroleum transactions, the very outcome that opponents of the new policy had warned about. At a gantry price of 0.779 dollars, petrol translates to roughly 1,075 naira per litre at the official rate and closer to 1,110 naira at parallel market rates, before transport, distribution, dealer margins and taxes are added.

Reaction within the sector has been largely critical. Independent marketers and the Petroleum Products Retail Outlets Owners Association of Nigeria have faulted the switch, cautioning that dollar based fuel transactions could nudge the economy toward creeping dollarisation and deepen instability in a market that was only recently insulated from exchange rate shocks. The refinery, for its part, has framed the change as a commercial necessity dictated by the currency in which it procures crude.

The backdrop is a global oil market that has swung violently through 2026. Brent crude, which averaged about 85 dollars per barrel in June and briefly slid below 70 dollars in early July after a memorandum of understanding between the United States and Iran, has since rebounded toward 90 dollars amid renewed tensions in the Gulf, trading near 89.93 dollars on July 21. For Nigeria, whose 2026 budget was benchmarked at 64.85 dollars per barrel, higher crude ordinarily lifts revenue, yet output of roughly 1.5 to 1.6 million barrels per day, still short of the two million barrel target, limits the upside, while the country’s deregulated downstream transmits every crude spike almost instantly to the pump.

The current episode also fits a longer arc that began when subsidy payments were scrapped in mid 2023, sending petrol from below 200 naira per litre to well above 1,000 naira and exposing consumers fully to market and currency movements. The Dangote refinery, with installed capacity of 650,000 barrels per day, was widely expected to stabilise supply and tame prices. Its emergence as the dominant domestic supplier now means that a single commercial decision on its part can ripple across every depot and filling station in the country.

For motorists, the immediate consequence is continued uncertainty at the pump, with loading having resumed but prices unsettled. Whether the dollar template hardens into a permanent feature of Nigeria’s downstream market, or is revised under pressure from marketers and regulators, is likely to shape fuel costs and foreign exchange demand in the weeks ahead.