The Dangote Petroleum Refinery has introduced a dollar-denominated pricing system for refined petroleum products, fixing the ex-depot price of Premium Motor Spirit (PMS), popularly known as petrol, at $0.779 per litre.
The new pricing structure, which also increased the benchmark prices for diesel and aviation fuel, marks the end of naira-based payments for refined products purchased from the refinery following the commencement of the naira-for-crude arrangement on 1 October 2024.
The move represents a major shift in the refinery’s commercial operations and could influence pricing trends in Nigeria’s deregulated downstream petroleum sector, where Dangote Refinery has become the country’s largest supplier of locally refined petroleum products.
Under the revised pricing template, which took effect on Monday, Automotive Gas Oil (diesel) is priced at $1.087 per litre, while Aviation Turbine Kerosene (ATK) is fixed at $0.942 per litre. Coastal deliveries of petrol will be sold at $1,044.62 per metric tonne.
The refinery announced 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that all previously issued naira-denominated Proforma Invoices and Deal Recaps for gantry and coastal transactions were no longer valid.
The notice from the refinery’s Group Commercial Operations stated: “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 applicable USD prices for each product, effective today, 13 July 2026, are provided below.”
The refinery clarified that the transition to dollar-based transactions does not apply to Liquefied Petroleum Gas (LPG). “Also note that this transition to USD does not apply to LPG transactions,” the company said.
Industry sources said the new pricing model reflects the refinery’s latest commercial strategy and is aimed at aligning product sales with the currency used for procuring a significant portion of its crude oil supply.
According to sources familiar with the development, the refinery adopted the new framework after experiencing a growing mismatch between the currency used to purchase crude oil and the currency in which refined products were sold domestically.
One source explained that Dangote Refinery now receives a larger proportion of its crude supplies from the Nigerian National Petroleum Company Limited (NNPCL) under dollar-denominated arrangements, while many refined products continued to be sold in naira.
The source said the currency imbalance had increased the refinery’s exposure to foreign exchange risks.
Another source said: “Dangote refinery is receiving fewer naira-denominated crude cargoes from NNPCL compared with dollar-denominated cargoes, while a larger volume of its petroleum products has been sold in naira. 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 development is expected to affect petroleum marketers who purchase products directly from the refinery for distribution nationwide. It could also influence downstream fuel prices, depending on foreign exchange movements, crude oil prices, logistics costs, transportation charges and operating expenses.
Dangote Refinery had previously adopted naira-based transactions following the Federal Government’s domestic crude supply initiative, which allowed local refiners to purchase crude oil in naira in a bid to strengthen domestic refining capacity, reduce pressure on foreign exchange demand and support fuel price stability.
However, industry stakeholders have reported challenges with the implementation of the policy, with a growing share of crude supplies shifting back to dollar-based transactions.
The latest move highlights the continued foreign exchange pressures affecting Nigeria’s downstream petroleum sector despite efforts to expand domestic refining and reduce dependence on imported petroleum products.
It also raises further questions about the future of the naira-for-crude arrangement and its role in shaping domestic fuel pricing.
The new dollar benchmark will now serve as the reference price for marketers buying directly from the refinery. However, the final retail pump price of petrol will depend on the prevailing naira-to-dollar exchange rate, distribution costs, regulatory charges and marketers’ operational expenses.
With Dangote Refinery playing an increasingly central role in Nigeria’s fuel supply chain, industry stakeholders are expected to closely monitor the impact of the new pricing model on the wider downstream market.
