Dangote Petroleum Refinery has officially ended naira-denominated sales of refined petroleum products, introducing a new pricing structure that sets the ex-depot price of Premium Motor Spirit (PMS), also known as petrol, at $0.779 per litre.
The new pricing regime, which took effect on Monday, also fixes the ex-depot price of Automotive Gas Oil (diesel) at $1.087 per litre and Aviation Turbine Kerosene at $0.942 per litre, while coastal deliveries of petrol will be sold at $1,044.62 per metric tonne.
The move marks the refinery’s return to dollar-based transactions after operating under the Federal Government’s naira-for-crude arrangement introduced in October 2024.
In a notice issued to petroleum marketers and customers, Dangote Refinery announced that all previously issued naira-denominated Proforma Invoices (PFIs) and Deal Recaps for gantry and coastal transactions had been cancelled.
According to the notice, all naira-based coastal and gantry PFIs and Deal Recaps issued before the transition are now invalid, and customers have been advised not to make payments against them.
The refinery, however, clarified that the new payment arrangement does not apply to Liquefied Petroleum Gas (LPG), which will continue to be sold under the existing payment framework.
Industry sources attributed the decision to the growing mismatch between the currency used to purchase crude oil and the currency in which refined products were being sold.
They explained that Dangote Refinery now receives a larger share of its crude oil supplies from the Nigerian National Petroleum Company Limited (NNPCL) under dollar-denominated agreements, while a significant portion of its refined products had continued to be sold locally in naira.
According to the sources, this imbalance increased the refinery’s exposure to foreign exchange risks, particularly amid exchange rate volatility and fluctuating global crude oil prices.
The switch to dollar pricing is expected to have major implications for petroleum marketers who depend heavily on Dangote Refinery for product supply. It could also influence retail fuel prices, depending on exchange rates, logistics costs, transportation margins, regulatory charges and marketers’ operating expenses.
The development has also renewed concerns about the future of the Federal Government’s naira-for-crude policy, which was introduced to support domestic refining, reduce pressure on foreign exchange demand and stabilise fuel prices but has faced implementation challenges as more crude supply transactions return to dollar payments.
As Nigeria’s largest supplier of refined petroleum products, Dangote Refinery’s new dollar-denominated pricing benchmark is expected to play a significant role in shaping downstream fuel prices across the country.
