Nigeria's downstream petroleum market is entering another significant phase following Dangote Refinery's decision to begin selling refined petroleum products in United States dollars, replacing the naira-based pricing system that had been in place under the Federal Government's naira-for-crude initiative.
The 700,000 barrels-per-day refinery has fixed the ex-depot price of Premium Motor Spirit (PMS), popularly known as petrol, at $0.779 per litre, while also introducing new dollar-denominated benchmark prices for diesel and aviation fuel. The revised pricing structure officially took effect on Monday, July 13, 2026.
The latest move represents a major shift in the refinery's commercial operations and is expected to influence pricing across Nigeria's deregulated downstream petroleum sector, where Dangote Refinery has become the country's largest supplier of refined petroleum products.
The development also effectively signals the end of naira payments for refined petroleum products sold by the refinery, reversing the framework introduced through the Federal Government's naira-for-crude programme, which commenced on October 1, 2024, to strengthen domestic refining, reduce pressure on foreign exchange demand and help stabilise fuel prices.
In a notice issued to petroleum marketers and customers, the refinery informed stakeholders that all previously issued naira-denominated Proforma Invoices (PFIs) and Deal Recaps for gantry and coastal transactions had been cancelled following the transition to dollar-based transactions.
The notice, signed by the refinery's Group Commercial Operations, stated:
"Following our email of July 9, 2026, regarding the transition from naira to United States dollars (USD), 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, July 13, 2026, are provided below."
Under the newly introduced pricing template, petrol sold through the gantry will cost $0.779 per litre, diesel will sell for $1.087 per litre, while aviation fuel has been pegged at $0.942 per litre. Coastal deliveries of PMS have been fixed at $1,044.62 per metric tonne.
The refinery, however, clarified that Liquefied Petroleum Gas (LPG) transactions remain unaffected by the policy.
It stated:
"Also note that this transition to USD does not apply to LPG transactions."
Industry findings indicate that the new pricing model reflects the refinery's evolving commercial strategy and is designed to align refined product sales with the currency used to purchase a significant portion of its crude oil feedstock.
Sources familiar with the development explained that the refinery had increasingly faced a mismatch between the currencies used for crude procurement and refined product sales.
According to one official, Dangote Refinery now receives a considerably larger share of its crude supplies from the Nigerian National Petroleum Company Limited (NNPCL) under dollar-denominated arrangements, even as a substantial volume of refined products has continued to be sold locally in naira.
The source noted that this imbalance had significantly increased the refinery's exposure to foreign exchange fluctuations.
Another industry source explained the rationale behind the transition, saying:
"Dangote Refinery is receiving fewer naira-denominated crude cargoes from NNPCL than 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 policy shift is expected to have far-reaching implications for petroleum marketers who depend heavily on supplies from Dangote Refinery for nationwide distribution. Analysts say the eventual retail pump price of petrol will now become increasingly sensitive to fluctuations in the foreign exchange market, international crude oil prices, transportation costs, logistics expenses, regulatory charges and marketers' operating margins.
The refinery had initially embraced naira transactions under the Federal Government's domestic crude supply initiative, which sought to encourage local refining, reduce dependence on imported petroleum products and ease pressure on Nigeria's foreign exchange reserves.
However, industry stakeholders have repeatedly reported implementation challenges in recent months, with a growing proportion of crude supplies reverting to dollar-based transactions.
The latest decision underscores the persistent foreign exchange pressures facing Nigeria's downstream petroleum industry despite ongoing efforts to deepen local refining capacity.
It also raises fresh questions about the long-term sustainability of the Federal Government's naira-for-crude policy and what its future could mean for domestic fuel pricing.
Going forward, marketers purchasing products directly from Dangote Refinery will use the new dollar benchmark as the reference price. Nevertheless, the final pump price paid by consumers will continue to depend on the prevailing naira-to-dollar exchange rate, logistics costs, transportation margins, statutory charges and other operating expenses across the fuel distribution chain.