Dangote Petroleum Refinery has officially transitioned to dollar-denominated sales of refined petroleum products, ending its naira-based pricing system and introducing a new pricing structure for Premium Motor Spirit (PMS), Automotive Gas Oil (diesel), and Aviation Turbine Kerosene (ATK).
Under the new pricing template, which took effect on Monday, petrol is now priced at 79.9 cents per litre at the gantry, while diesel will sell for 1.087 dollars per litre and aviation fuel for 94.2 cents per litre. Coastal deliveries of petrol have been fixed at 1,044.62 dollars per metric tonne.
The refinery announced the development in a notice to petroleum marketers and customers, stating that all previously issued naira-denominated Proforma Invoices and Deal Recaps for gantry and coastal transactions are no longer valid and that all payments for applicable products must now be made in United States dollars.
The company, however, clarified that the new payment structure does not apply to Liquefied Petroleum Gas (LPG), which will continue under its existing transaction framework.
According to industry sources, the move is intended to align the refinery’s sales currency with the currency used to procure a significant portion of its crude oil feedstock. They explained that while a growing share of crude oil supplied to the refinery is now paid for in dollars, a substantial volume of refined products has continued to be sold in naira, creating a currency mismatch.
The imbalance, coupled with fluctuations in international crude oil prices and exchange rate volatility, reportedly increased the refinery’s exposure to foreign exchange risks, making a transition to dollar-based sales commercially necessary.
The decision marks a significant shift from the refinery’s earlier participation in the Federal Government’s naira-for-crude initiative, introduced in October 2024 to enable local refiners to purchase crude oil in naira. The policy was designed to strengthen domestic refining, reduce pressure on foreign exchange demand, and support fuel price stability.
However, industry stakeholders say the implementation of the initiative has weakened in recent months as a larger proportion of crude oil supplies reverted to dollar-denominated transactions.
The latest development is expected to have far-reaching implications for petroleum marketers who rely on Dangote Refinery for product supplies across the country. It could also influence retail fuel prices, with the final pump price expected to depend on prevailing foreign exchange rates, international crude oil prices, transportation costs, logistics, regulatory charges, and marketers’ operating expenses.
As Nigeria’s largest supplier of refined petroleum products, pricing decisions by Dangote Petroleum Refinery continue to play a crucial role in shaping competition and pricing trends within the country’s deregulated downstream petroleum sector.
The transition also raises fresh concerns about the future of the government’s naira-for-crude policy and highlights the persistent foreign exchange challenges facing Nigeria’s downstream oil industry despite ongoing efforts to boost local refining capacity and reduce dependence on imported petroleum products.
