Dangote Petroleum Refinery has ceased naira payments for refined petroleum products and commenced sales in US dollars, effective July 13, 2026. The ex-depot price for Premium Motor Spirit (petrol) has been set at $0.779 per liter, with diesel at $1.087 per liter and aviation fuel at $0.942 per liter. Coastal deliveries of petrol are priced at $1,044.62 per metric tonne. This change invalidates all prior naira-denominated invoices and deal recaps for gantry and coastal transactions, though Liquefied Petroleum Gas (LPG) transactions are unaffected.
The refinery's decision stems from a growing currency mismatch, where a significant portion of its crude oil feedstock is procured in dollars from the Nigerian National Petroleum Company Limited, while a large volume of its refined products were previously sold in naira. This imbalance, coupled with volatility in international crude oil prices and exchange-rate uncertainty, led to increased exposure to foreign exchange risks. The shift aims to align product sales with the currency used for crude procurement, adopting a uniform pricing framework.
This move marks a significant departure from the Federal Government's naira-for-crude policy, which began on October 1, 2024, designed to strengthen domestic refining and stabilize fuel prices by supplying local refiners with crude in naira. However, this arrangement faced implementation challenges, with a growing number of crude supplies reverting to dollar-based transactions. While the dollar benchmark will serve as the reference price for marketers, the final retail pump price for consumers will still be influenced by the naira-to-dollar exchange rate, logistics costs, transportation margins, regulatory charges, and marketers' operating expenses.
The transition is expected to have substantial implications for petroleum marketers who source products directly from Dangote Refinery, the country's largest supplier of refined petroleum products. It could also influence fuel pricing dynamics across Nigeria's deregulated downstream petroleum sector. Analyst Dr. Muda Yusuf, an economist, noted that it's too early for a definitive conclusion, awaiting an official pronouncement from Dangote Refinery. Some analysts anticipate increased operating costs for independent marketers who will now need to source foreign exchange to purchase products.
Despite ongoing efforts to boost local refining and reduce reliance on imported fuels, this change highlights persistent foreign exchange pressures within Nigeria's downstream petroleum sector. The move by Dangote, which has considerable influence over the domestic fuel market, raises questions about the future effectiveness of the government's naira-for-crude policy and its broader impact on domestic fuel pricing and stability.
