The naira weakened in the official foreign exchange market as increased demand for dollars followed Dangote Petroleum Refinery’s decision to begin selling refined petroleum products in US dollars.

The refinery’s new pricing policy requires local fuel marketers to source foreign currency before purchasing petrol, diesel and aviation fuel. Market analysts say the move has added pressure to Nigeria’s foreign exchange market by increasing demand for the greenback.

The shift comes after Dangote Refinery suspended the sale of petroleum products in naira, citing the need to align its sales with the currency used to procure crude oil. The company said the decision was necessary to manage rising foreign exchange obligations and ensure operational sustainability.

Under the revised pricing structure, petrol is now sold at $0.779 per litre, with diesel and aviation fuel also priced in dollars. As a result, marketers are expected to rely more heavily on the foreign exchange market to meet their purchase obligations.

Currency dealers said the increased demand for dollars contributed to a slight weakening of the naira at the official market, while analysts warned that prolonged dollar-denominated fuel transactions could place additional strain on the local currency.

Industry experts also noted that the new pricing model could expose domestic fuel prices to exchange rate fluctuations, as marketers may pass higher foreign exchange costs on to consumers through pump prices.

Although increased domestic refining has reduced Nigeria’s dependence on imported petroleum products, economists believe the refinery’s dollar-based sales could offset some of those gains by creating fresh demand for foreign exchange within the local market.

They added that the impact on the naira will largely depend on future foreign exchange inflows, market liquidity and whether the dollar-based pricing arrangement remains in place over the long term.