Nigeria's downstream petroleum sector is facing renewed uncertainty following Dangote Petroleum Refinery's decision to begin quoting the prices of petroleum products in United States dollars for selected transactions, a move that has drawn criticism from independent marketers and mixed reactions from energy experts.
The development has reignited conversations around deregulation, foreign exchange management, consumer protection, and the future of domestic fuel pricing, with stakeholders warning that the policy could have significant consequences for Nigeria's economy if left unchecked.
The refinery recently informed marketers that all previously issued naira-based Proforma Invoices (PFIs) and Deal Recaps for coastal and gantry transactions had become invalid following its transition to dollar-denominated pricing.
In a notice sent to customers, the company 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 decision applies to Premium Motor Spirit (petrol), Automotive Gas Oil (diesel), and aviation fuel sold through gantry and coastal transactions.
Marketers warn of economic consequences
The announcement immediately triggered price adjustments across major fuel depots in Lagos, Port Harcourt, and Warri as operators recalculated replacement costs.
Industry data from Petroleumprice.ng showed that petrol prices rose by as much as ₦113 per litre at some depots, while diesel prices increased by as much as ₦150 per litre in certain locations.
Reacting to the development, the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) warned that pricing locally consumed petroleum products in dollars could gradually push Nigeria toward a dollarised economy.
PETROAN National President, Billy Gillis-Harry, acknowledged the refinery's role in strengthening Nigeria's energy security but argued that major commercial decisions should also consider broader national economic interests.
"This will turn Nigeria into a dollarised economy. That is the meaning, and that's why we are saying that some of these decisions, in as much as it's a private company that has the right to regulate the economy to do what it wants, we still have regulations, not just of price, but of values that should be able to stabilise our economy."
He further expressed concern over what he described as unpredictable pricing decisions capable of destabilising the downstream market.
"At the end of the day, I think everything has been interrogated properly, and all the stakeholders will then take a decision. Because we cannot have one player, that is the refiner waking up today to change price; tomorrow it increases it; another day it does something else; and suddenly it wakes up and says everybody who had paid naira in his company is no longer valid."
According to Gillis-Harry, marketers who are compelled to purchase petroleum products in dollars may eventually transfer the additional costs to consumers.
"It is like saying those who buy from Dangote in dollars should also sell in dollars to the masses. But we are not going to do that."
He maintained that PETROAN would continue sourcing products from multiple suppliers while urging the Nigerian National Petroleum Company Limited (NNPC) to revive the country's refineries to encourage healthy competition.
"PETROAN will continue to patronise Dangote, patronise imported products, and keep encouraging NNPC to up their game, and make sure that the refineries are working. Because if the four refineries are working, we will not be talking about this at this time."
The association also raised concerns about marketers having to source scarce foreign exchange from commercial banks before purchasing fuel.
"To get the US dollar from Nigerian banks, how is that going to work? We have to source dollars? We'll see how it goes."
Despite his reservations, Gillis-Harry expressed optimism that government and industry stakeholders would resolve the issue without triggering fuel scarcity.
"I know this will be resolved. I believe that it will be resolved. It will not lead to fuel scarcity. We cannot expect the worst for our country. We will always expect the best for our country."
IPMAN appeals to Tinubu
The Independent Petroleum Marketers Association of Nigeria (IPMAN) also urged President Bola Tinubu to intervene swiftly by sustaining the crude-for-naira arrangement introduced to support local refining.
National Publicity Secretary of IPMAN, Chinedu Ukadike, warned that fuel prices in Nigeria are already heavily influenced by crude oil prices and foreign exchange rates.
"My only response to this issue is to appeal to President Bola Tinubu that whatever the presidential committee on petroleum should do, especially the minister, should address this issue and help us cushion the ecosystem and bring stability in terms of products and pump price volatility."
Ukadike stressed that increasing demand for dollars among marketers would likely worsen pressure on Nigeria's foreign exchange market.
"The sale of fuel in dollars will ultimately affect prices at the pump. Exchange rate affects the price of petroleum products because some vessels and other processes involved in bringing in the products are paid for in dollars."
He added:
"It will definitely impact the price of petrol. There are no two ways about it. Petrol prices in Nigeria are determined by two major things — crude oil prices in the international market and the dollar exchange rate."
He further appealed to the Federal Government to preserve the crude-for-naira arrangement, particularly amid ongoing geopolitical tensions affecting global oil markets.
"The President should please ensure that the crude-to-naira deal is sustained during this period of crisis at the Strait of Hormuz."
Depot prices climb
The ripple effects of Dangote Refinery's announcement were quickly reflected in depot prices across the country.
In Lagos, several depots reportedly increased petrol loading prices from around ₦1,090 to ₦1,120 per litre.
In Port Harcourt, Matrix Depot was reported to have raised petrol prices from ₦1,137 to ₦1,250 per litre, while diesel climbed from ₦1,500 to ₦1,650 per litre.
Similar adjustments were also recorded in Warri, where petrol prices increased by between ₦24 and ₦110 per litre, depending on the depot.
Although Dangote Refinery has yet to officially announce a revised ex-depot petrol price under the new payment structure, marketers say replacement costs are already influencing prices.
Experts divided over policy
Energy experts offered contrasting opinions on the refinery's decision.
Petroleum economist and Professor Emeritus, Wumi Iledare, argued that the development should be viewed through the lens of deregulation and commercial risk management rather than price manipulation.
According to him, publishing a selling price does not amount to price fixing.
"Dangote refinery has not fixed the market price of petroleum products; it has announced the price at which it is prepared to sell its own output."
He explained that in a deregulated market, competition ultimately determines whether buyers accept a producer's price.
"Price fixing refers to anti-competitive coordination among competitors, not a refinery publishing its own ex-depot price."
Iledare also said dollar pricing could simply reflect efforts to reduce foreign exchange exposure.
"The shift to dollar-denominated pricing is best understood as a response to foreign exchange exposure. If crude oil feedstock is procured substantially in dollars while refined products are sold in naira, the refinery bears currency mismatch risk."
However, he stressed that regulators must continue ensuring transparency, fair competition and adequate consumer protection within the downstream sector.
Domestic sales should remain in naira — Ayoade
On the other hand, University of Lagos energy professor, Dayo Ayoade, questioned the appropriateness of conducting domestic petroleum transactions in foreign currency.
"Clearly, the naira is the legal tender in Nigeria, and the Central Bank states that the naira is our domestic legal tender."
While acknowledging that Dangote Refinery may be attempting to shield itself from exchange rate losses, Ayoade argued that the refinery had previously benefited from significant local support.
"From Dangote refinery's point of view, I consider what they are doing as an attempt to avoid foreign exchange losses and maybe also obtain stable pricing since they are buying NNPC crude in dollars."
He added:
"But how fair is that? The Central Bank of Nigeria provided a lot of foreign exchange support for the construction of this refinery, and the refinery has also enjoyed naira-denominated crude cargoes in the past."
Ayoade called on the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Federal Competition and Consumer Protection Commission (FCCPC), and the Central Bank of Nigeria to carefully examine the policy.
"The action may not be illegal on the face of it, but it is not proper. It requires NMDPRA, FCCPC, and the CBN to look very closely at the Dangote Refinery."
Government urged to revisit naira-for-crude deal
Chief Executive Officer of Petroleumprice.ng, Jeremiah Olatide, also called on the Federal Government to urgently revisit the crude-for-naira arrangement, warning that expanding dollar-denominated petroleum transactions would place additional pressure on consumers.
"The dollarisation of petroleum products at the gantry will not stand. The effect of the oil price spike is already a burden on Nigerians."
He added:
"Oil and its components are traded in dollars as there is no law that restricts Dangote from trading in dollars. However, domestic petroleum products must be handled in a way that protects consumers and sustains market stability."
Industry faces fresh uncertainty
The latest development comes months after Dangote Refinery significantly reshaped Nigeria's fuel supply chain by reducing dependence on imported petroleum products and emerging as the country's dominant domestic supplier.
However, its decision to adopt dollar-denominated pricing has opened a fresh debate over how Nigeria should balance market deregulation, private investment, foreign exchange realities and consumer protection, with marketers urging government intervention before the policy translates into higher pump prices for millions of Nigerians.