(Dangote Refinery. Photo Credit: The Business Times)
Dangote Petroleum Refinery has fixed the ex-depot price of Premium Motor Spirit (petrol) at $0.779 per litre, unveiling a new pricing template that also raises the benchmark prices for diesel and aviation fuel following its transition to dollar-denominated transactions.
The move signals an end to naira payments for the purchase of refined petroleum products, which began under the Federal Government’s naira-for-crude arrangement that commenced on October 1, 2024.
The development marks a major shift in the refinery’s commercial operations and could reshape pricing dynamics in Nigeria’s deregulated downstream petroleum sector, where Dangote has emerged as the country’s largest supplier of refined petroleum products.
The revised prices, which took effect on Monday, place Automotive Gas Oil (diesel) at $0.942 per litre, while coastal deliveries of petrol have been fixed at $1,044.62 per metric tonne.
The refinery disclosed the new rates in a notice issued to petroleum marketers and customers, stating that all previously issued naira-denominated Proforma Invoices and Deal Recaps for gantry and coastal transactions had become invalid.
The notice, signed by the refinery’s Group Commercial Operations, referenced an earlier communication dated July 9, 2026, regarding the transition from naira to US dollars, noting that all issued naira coastal and gantry PFIs and Deal Recaps were now invalid, and that no payments should be made against them, with the new applicable dollar prices taking effect from July 13, 2026.
Under the new pricing schedule, petrol sold through the gantry will cost $0.779 per litre, diesel $1.087 per litre, aviation fuel $0.942 per litre, while coastal petrol supplies will sell for $1,044.62 per metric tonne. The company clarified that the new pricing arrangement does not apply to Liquefied Petroleum Gas transactions.
Findings indicate that the new dollar-denominated pricing reflects the refinery’s latest commercial pricing structure and is intended to align petroleum product sales with the currency used to procure a significant proportion of its crude oil feedstock.
Sources familiar with the development said the refinery considered it necessary to adopt a uniform pricing framework following a growing imbalance between the currency used to procure crude oil and the currency in which refined products were being sold.
One official noted that Dangote Refinery now receives a significantly larger share of its crude oil supplies from the Nigerian National Petroleum Company Limited under dollar-denominated supply arrangements, while a substantial volume of its refined products has continued to be sold domestically in naira, explaining that the mismatch had increased the refinery’s exposure to foreign exchange risks.
Explaining the rationale behind the move further, another source said Dangote Refinery is receiving fewer naira-denominated crude cargoes from NNPCL compared to dollar-denominated cargoes, while a larger volume of its petroleum products has been sold in naira, adding that the resulting currency mismatch, combined with volatility in international crude oil prices and continued exchange-rate uncertainty, made it necessary to migrate product sales to dollars.
The decision is expected to have significant implications for petroleum marketers, many of whom source products directly from the refinery for nationwide distribution, and could also influence fuel pricing in the downstream market depending on movements in the foreign exchange market and international crude oil prices.
The refinery had previously embraced naira-denominated transactions following the Federal Government’s domestic crude supply initiative, under which local refiners were supplied crude oil in naira to strengthen domestic refining, reduce pressure on foreign exchange demand and stabilise fuel prices.
However, the arrangement has faced implementation challenges in recent months, with industry stakeholders reporting that a growing proportion of crude supplies has reverted to dollar-based transactions.
The latest shift underscores the lingering foreign exchange pressures confronting Nigeria’s downstream petroleum sector despite ongoing efforts to deepen local refining and reduce dependence on imported fuels, and raises fresh questions about the future of the government’s naira-for-crude policy and its impact on domestic fuel pricing.
The new dollar benchmark will now serve as the reference price for marketers purchasing products directly from the refinery, although the eventual retail pump price of petrol will depend on the prevailing naira-to-dollar exchange rate, logistics costs, transportation margins, regulatory charges and marketers’ operating expenses.
In recent months, pump prices have fluctuated in response to movements in crude oil prices, foreign exchange rates and competition among suppliers, with industry stakeholders closely monitoring pricing decisions by Dangote Refinery because of its growing influence on the domestic fuel market.