Dangote Refinery switches to dollar pricing for petrol, diesel sales

Dangote Petroleum Refinery has commenced the sale of refined petroleum products in United States dollars, replacing its previous naira-based pricing system and introducing a new pricing template for petrol, diesel and aviation fuel.

Under the revised structure petrol will be sold at an ex-depot price of $0.779 per litre, while Automotive Gas Oil (diesel) will cost $1.087 per litre and Aviation Turbine Kerosene (ATK) will sell for $0.942 per litre.

The refinery also fixed the price of petrol supplied through coastal deliveries at $1,044.62 per metric tonne.

The new pricing regime, which took effect on Monday, signals a major shift in the refinery’s commercial operations and effectively ends the acceptance of naira payments for refined products that followed the commencement of the Federal Government’s naira-for-crude initiative in October 2024.

In a notice sent to customers and petroleum marketers, Dangote Refinery said all previously issued naira-denominated Proforma Invoices and Deal Recaps for gantry and coastal transactions had been cancelled.

“Following our email on the 9th of July, 2026, regarding the transition from Naira to United States Dollars, please note that all issued Naira Coastal and Gantry PFIs/Deal Recaps are now invalid, and no payments should be made against them,” the company stated.

The refinery explained that the newly introduced dollar-based prices would serve as the benchmark for all transactions involving petrol, diesel and aviation fuel.

However, it clarified that the new arrangement does not apply to Liquefied Petroleum Gas (LPG), which will continue to be traded under existing payment terms.

Industry sources said the move was driven by the refinery’s need to align the currency used for product sales with that used in sourcing crude oil, a significant portion of which is now reportedly purchased under dollar-denominated agreements.

According to market insiders, the refinery had increasingly faced foreign exchange exposure because many of its refined products were sold locally in naira, while a growing share of its crude feedstock was acquired in dollars.

One source familiar with the development said the imbalance had become difficult to sustain amid fluctuations in exchange rates and international crude oil prices.

“Dangote refinery is receiving fewer naira-denominated crude cargoes compared to dollar-denominated supplies, while a substantial volume of refined products has continued to be sold in naira. The resulting currency mismatch created significant exchange-rate risks,” the source said.

Another industry source noted that the transition to dollar pricing was aimed at establishing a more consistent commercial framework and reducing the refinery’s vulnerability to foreign exchange volatility.

The development is expected to have far-reaching implications for petroleum marketers, many of whom rely on supplies from the refinery for distribution across the country.

Analysts say the new pricing structure could influence domestic fuel prices, depending on movements in the foreign exchange market and global crude oil prices.

The refinery had adopted naira-based transactions following the introduction of the government’s domestic crude supply programme, which was designed to strengthen local refining, reduce pressure on foreign exchange demand and improve fuel price stability.

However, stakeholders have recently raised concerns over challenges associated with the implementation of the policy, particularly the increasing volume of crude supplied under dollar-based arrangements.

The latest move by Dangote Refinery is likely to reignite debate over the effectiveness and future of the naira-for-crude policy, as well as its implications for the downstream petroleum sector.

As the country’s largest refining facility and a dominant supplier of refined products, pricing decisions by the refinery are closely watched by industry operators because of their potential impact on fuel costs nationwide.

While the refinery has established new dollar benchmarks for product sales, the eventual pump price paid by consumers will continue to depend on several factors, including exchange rates, transportation costs, distribution margins and other operational expenses within the downstream value chain.