Dangote refinery switches petrol sales to dollar pricing

Dangote Petroleum Refinery has ended naira-denominated sales of refined petroleum products, introducing a new pricing template that fixes the ex-depot price of Premium Motor Spirit (petrol) at $0.779 per litre.

The new pricing regime, which took effect on Monday, also sets the ex-depot price of Automotive Gas Oil (diesel) at $1.087 per litre and Aviation Turbine Kerosene at $0.942 per litre, while coastal deliveries of petrol will be sold at $1,044.62 per metric tonne.

The move marks the refinery’s return to dollar-based transactions after operating under the Federal Government’s naira-for-crude arrangement introduced in October 2024.

In a notice issued to petroleum marketers and customers, the refinery announced that all previously issued naira-denominated Proforma Invoices and Deal Recaps for gantry and coastal transactions had been cancelled.

“Following our email of July 9, 2026, regarding the transition from naira to United States dollars, all issued naira coastal and gantry PFIs/Deal Recaps are now invalid, and no payments should be made against them,” the notice stated.

The refinery, however, clarified that the new payment arrangement does not apply to Liquefied Petroleum Gas (LPG), which will continue to be transacted under the existing framework.

Industry sources said the decision was driven by the growing mismatch between the currency used to purchase crude oil and the currency in which refined products were being sold.

According to the sources, Dangote Refinery now receives a larger share of its crude oil supplies from the Nigerian National Petroleum Company Limited (NNPCL) under dollar-denominated arrangements, while much of its refined products had continued to be sold locally in naira.

The imbalance, they said, increased the refinery’s exposure to foreign exchange risks, especially amid exchange rate volatility and fluctuating global crude oil prices.

The refinery’s shift to dollar pricing is expected to have significant implications for petroleum marketers, who rely heavily on Dangote Refinery for product supply, and could influence retail fuel prices depending on exchange rates, logistics costs, transportation margins, regulatory charges and marketers’ operating expenses.

The development also raises fresh concerns over the future of the Federal Government’s naira-for-crude policy, which was introduced to strengthen domestic refining, reduce demand for foreign exchange and stabilise fuel prices but has faced implementation challenges in recent months as more crude supply transactions reverted to dollar payments.

With Dangote Refinery now serving as Nigeria’s largest supplier of refined petroleum products, the new dollar-denominated benchmark is expected to play a key role in determining downstream fuel pricing across the country.