Dangote Refinery Switches to Dollar Pricing, Sets PMS at $0.779/litre

Dangote Petroleum Refinery has announced a new dollar-denominated pricing template for refined petroleum products, fixing the ex-depot price of Premium Motor Spirit (PMS, commonly known as petrol) at $0.779 per litre.

The move, which also includes upward adjustments to benchmark prices for diesel and aviation fuel, marks a significant shift away from naira-based transactions at the refinery.

It effectively ends the era of direct naira payments for refined products that was introduced under the Federal Government’s naira-for-crude oil swap arrangement, which began on October 1, 2024.

Key Details of the New Pricing Regime are;

• Petrol (PMS): Fixed at $0.779 per litre ex-depot.

• Diesel and Aviation Turbine Kerosene (ATK): Benchmark prices raised under the new template (specific figures not detailed in the initial announcement).

• Currency: All transactions now in US dollars, replacing the previous naira-based system.

The refinery described the new pricing as a reflection of its transition to a fully commercial, import-parity-aligned model following the successful ramp-up of operations and the conclusion of the initial naira-crude phase.

The naira-for-crude arrangement was introduced by the Federal Government in late 2024 to ease pressure on foreign exchange reserves, reduce dependence on imported fuel, and stabilise the downstream sector.

Under that deal, local refineries led by Dangote received crude oil in naira and sold refined products in naira.

Dangote Refinery, Africa’s largest single-train refinery with a capacity of 650,000 barrels per day, has been gradually increasing local supply. However, persistent challenges with crude supply, foreign exchange availability, and high operational costs appear to have prompted the return to dollar-based pricing.

Industry analysts say the move could lead to higher pump prices across Nigeria, as marketers will now need dollars to purchase products from the refinery before adding distribution, transportation, and dealer margins.

This comes amid ongoing volatility in the foreign exchange market and global oil prices.

Marketers and stakeholders are expected to react in the coming days as the new template takes full effect.

Many have previously warned that a full dollarisation of the supply chain could reverse some of the gains recorded under the naira-crude initiative, potentially reigniting fuel price hikes and inflationary pressures.