Dangote Refinery Shifts Petrol and Fuel Pricing to US Dollars, Ending Naira Transactions

The Dangote Petroleum Refinery has officially transitioned its commercial operations to a dollar-denominated pricing model, effectively ending the Naira-for-crude payment structure for domestic fuel purchases. This major policy shift, which invalidates all previous Naira-denominated invoices, is expected to significantly reshape pricing dynamics within Nigeria’s deregulated downstream petroleum sector, where the refinery stands as the country’s largest supplier.

Under the revised pricing framework, the refinery has set the ex-depot price of Premium Motor Spirit (petrol) sold through the gantry at $0.779 per litre, while coastal deliveries are fixed at $1,044.62 per metric tonne. The new template also raises benchmark rates for other refined products, pricing Automotive Gas Oil (diesel) at $1.087 per litre and Aviation Turbine Kerosene (jet fuel) at $0.942 per litre. The company clarified that this currency transition does not apply to Liquefied Petroleum Gas (LPG) transactions, which will remain unchanged.

The decision to migrate to United States Dollars stems from a growing financial imbalance and foreign exchange risk. Industry sources indicate that the refinery currently procures a significant portion of its crude oil feedstock in USD including supplies from the Nigerian National Petroleum Company Limited but had been selling the resulting refined products locally in Naira. This mismatch exposed the refinery to high exchange-rate volatility and international market fluctuations, making a uniform dollar-pricing framework necessary to stabilize its commercial operations.

This shift marks a departure from the Federal Government’s domestic Naira-for-crude initiative, which was originally implemented to ease local foreign exchange pressure and stabilize pump prices. However, due to ongoing implementation challenges, a growing proportion of crude supplies has reverted to dollar-based transactions.

The immediate invalidation of all existing Naira-denominated Proforma Invoices means domestic petroleum marketers must now source foreign exchange to purchase products directly from the refinery. While these new rates establish the base dollar benchmark, the eventual retail price at local filling stations will remain highly dependent on the prevailing Naira-to-Dollar exchange rate, transport logistics, and local regulatory fees.