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(Bloomberg) — Dangote Refinery is halting the sale of petroleum products in naira within the Nigerian market, Punch Newspaper reported, citing failings in a landmark 2024 plan for the state-owned energy company to supply crude in local currency.
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The refinery issued a new pricing template on Monday that quoted prices in dollars, the newspaper said, citing unnamed company sources. The sources explained Dangote Petroleum Refinery & Petrochemicals FZE receives fewer naira-denominated cargoes than ones priced in dollars, exposing it to currency risks.
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Under the new pricing template, gantry prices of gasoline will now be $0.779 per liter, diesel $1.087 per liter, aviation fuel $0.942 per liter, and coastal supplies of gasoline at $1,044.62 per metric ton, according to the newspaper.
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A spokesman of the Dangote Group confirmed that the newspaper’s reporting was accurate. A government spokesman did not immediately respond to a request for comment.
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Moving to dollar prices backtracks on the deal between Dangote and the government for the state-owned Nigerian National Petroleum Co. to sell crude in naira, in return for the Lagos-based refinery supplying naira-priced refined products in the domestic market.
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The agreement was designed to curb domestic demand for dollars and ease pressure on the local currency. It suffered sharp volatility after its long-standing peg to the greenback was eased in 2023 but has been more stable since the refinery come on stream in 2024.
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Reverting to sales in dollars could renew pressure on the Nigerian unit.
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The 700,000 barrels-per-day refinery, owned by Africa’s richest person Aliko Dangote, operated at 101.3% of its installed capacity in May, according to the latest report from the Nigerian regulator.
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Local refineries, of which Dangote’s capacity makes up the vast majority, received an average 578,000 barrels of crude per day in May, according to the downstream regulator.
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—With assistance from Nduka Orjinmo.
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