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Dangote Refinery has ended naira-denominated sales of petrol, diesel and aviation fuel, introducing a new dollar-based pricing template for marketers purchasing refined products.
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The switch reflects a growing mismatch between dollar-priced crude purchases and naira-priced product sales, with the refinery citing foreign-exchange exposure and commercial realities.
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Petroleum marketers may become more exposed to exchange-rate movements, making retail fuel prices increasingly sensitive to fluctuations in the naira and global crude oil prices.
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The development raises fresh questions about the future of the Federal Government’s naira-for-crude policy, which was introduced to reduce FX demand and stabilise domestic fuel prices
July 14, (THEWILL) — Dangote Petroleum Refinery has ended naira-denominated sales of Premium Motor Spirit (petrol), introducing a new dollar-based pricing template that fixes the ex-depot price of petrol at $0.779 per litre in a move that could reshape fuel pricing dynamics and raise fresh questions about the future of the Federal Government’s naira-for-crude policy.
The refinery also revised the benchmark prices for Automotive Gas Oil (diesel) to $1.087 per litre and Aviation Turbine Kerosene to $0.942 per litre, while coastal deliveries of petrol were fixed at $1,044.62 per metric tonne.
The new pricing, which took effect on Monday, marks the end of naira payments for refined petroleum products after nearly two years of domestic transactions under the government’s naira-for-crude initiative introduced in October 2024.
In a notice issued to petroleum marketers and customers, the refinery said all previously issued naira-denominated Proforma Invoices and Deal Recaps for gantry and coastal transactions had become invalid.
“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 notice signed by the refinery’s Group Commercial Operations stated.
The refinery, however, clarified that the new pricing structure does not apply to Liquefied Petroleum Gas (LPG).
Industry sources familiar with the development said the transition reflects changing realities in the refinery’s crude procurement strategy. According to the sources, Dangote Refinery now purchases a significantly larger proportion of its crude oil in dollars, while much of its refined products have continued to be sold domestically in naira.
The resulting currency mismatch, combined with persistent exchange-rate volatility and fluctuations in international crude oil prices, increased the refinery’s foreign exchange exposure, making it commercially difficult to maintain naira-denominated product sales.
The refinery had initially embraced naira transactions under the Federal Government’s domestic crude supply programme, which sought to strengthen local refining, reduce pressure on foreign exchange demand and stabilise fuel prices. However, industry stakeholders have recently reported that a growing share of crude supplies has reverted to dollar-denominated arrangements, reducing the effectiveness of the policy.
The transition to dollar-denominated sales does not automatically mean petrol pump prices will increase, but it changes the pricing dynamics for marketers purchasing products directly from the refinery.
With crude purchases and refined product sales now increasingly conducted in dollars, marketers will also need foreign exchange to lift products from the refinery. That means movements in the exchange rate could feed more directly into depot prices and, ultimately, retail pump prices.
The shift means movements in the naira’s exchange rate could have a more direct impact on the cost of petrol. If the naira weakens against the dollar, marketers will need more naira to buy the same volume of fuel, increasing the likelihood of higher pump prices. Conversely, a stronger naira could help moderate fuel costs. International crude oil prices will remain another major determinant of domestic fuel prices.
The development also raises fresh questions about the future of the Federal Government’s naira-for-crude initiative, which was introduced to reduce demand for foreign exchange, support the naira and moderate domestic fuel prices. While the policy has not been scrapped, Dangote’s return to dollar-denominated transactions suggests commercial realities within the crude supply chain are increasingly outweighing the original objectives of the programme.
As Nigeria’s largest supplier of refined petroleum products, pricing decisions by Dangote Refinery carry significant weight across the downstream market. Industry players are therefore expected to closely monitor both foreign exchange movements and international oil prices, as both are likely to play an even greater role in determining fuel costs in the months ahead.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
