Dangote Petroleum Refinery has formally migrated to a dollar-denominated pricing system for the sale of petrol, diesel and aviation fuel, a move that could significantly alter pricing trends in Nigeria’s downstream petroleum market.
Under the new pricing structure, Premium Motor Spirit (PMS) will sell at an ex-depot price of $0.779 per litre, while Automotive Gas Oil (AGO), commonly known as diesel, is priced at $1.087 per litre. Aviation Turbine Kerosene (ATK) will be sold at $0.942 per litre.
The refinery also fixed the price of coastal petrol supplies at $1,044.62 per metric tonne.
The new regime took effect on Monday and effectively ends the refinery’s naira-based product sales arrangement introduced following the Federal Government’s naira-for-crude initiative launched in October 2024.
In a communication sent to marketers and customers, the refinery announced the cancellation of all previously issued naira-denominated transaction documents.
“Following our email of July 9, 2026, regarding the transition from naira to United States dollars, all issued naira coastal and gantry PFIs/Deal Recaps are hereby invalid and no payments should be made against them,” the notice stated.
The company said the newly announced dollar prices would now serve as the applicable rates for petroleum products supplied through its gantry and coastal channels.
Liquefied Petroleum Gas (LPG), however, was exempted from the new arrangement, with the refinery stating that existing transaction terms for cooking gas would remain unchanged.
Industry sources linked the policy shift to the growing disparity between the currencies used to procure crude oil and those used to sell refined products.
According to insiders, while Dangote Refinery had continued to sell a substantial portion of its products in naira, an increasing share of its crude oil supplies was being sourced under dollar-based agreements.
The situation, they said, exposed the refinery to foreign exchange risks and revenue mismatches.
A source familiar with the development explained that the refinery had found it increasingly difficult to sustain naira sales while paying for a large volume of crude oil in dollars.
“The refinery is now receiving more dollar-denominated crude supplies than naira-denominated cargoes. Maintaining product sales in naira under such conditions creates significant exchange-rate exposure and commercial challenges,” the source said.
Another industry official noted that exchange-rate volatility and fluctuations in global crude prices further influenced the decision to adopt a uniform dollar-based pricing framework.
The development is expected to have implications for petroleum marketers and fuel consumers, as the cost of products purchased from the refinery will now be directly influenced by movements in the foreign exchange market.
Analysts say the move could increase pressure on fuel prices if the naira weakens further against the dollar, although market competition and other supply factors may help moderate the impact.
The decision also raises fresh concerns about the sustainability of the government's naira-for-crude programme, which was introduced to support local refining, conserve foreign exchange and help stabilise domestic fuel prices.
Recent reports from industry operators indicate that implementation of the policy has become increasingly challenging, with a growing share of crude oil transactions reverting to dollar settlements.
As Nigeria’s largest refining facility and the dominant supplier of petroleum products to the domestic market, Dangote Refinery’s pricing decisions have become a major determinant of fuel market trends.
With the introduction of dollar-based pricing, marketers purchasing products from the refinery will now calculate costs using prevailing exchange rates, while retail pump prices will continue to be influenced by logistics expenses, distribution margins, taxes and international oil market conditions.
The latest move underscores the persistent foreign exchange challenges facing Nigeria’s energy sector despite ongoing efforts to boost domestic refining capacity and reduce reliance on imported petroleum products.
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