Dangote Refinery switches to dollar sales for petrol and diesel
Dangote Petroleum Refinery has transitioned sales of Premium Motor Spirit (petrol) and Automotive Gas Oil (diesel) from naira to US dollars for certain buyers, a move that could reshape fuel supply dynamics in Nigeria. The decision, announced on 14 July 2026, means bulk purchasers and marketers must now pay in dollars, though retail consumers will continue to buy fuel at filling stations in naira.
Why the switch to dollars?
The refinery's shift is driven by its significant foreign exchange exposure, as operational costs—including crude oil purchases and international expenses—are dollar-denominated. Industry reports indicate that the previous naira-based sales arrangement, supported by the Federal Government's crude-for-naira scheme, became unsustainable due to forex pressures and the refinery's need to meet dollar obligations. Aliko Dangote, president of Dangote Group, has not publicly commented on the change, but the move aligns with the refinery's broader financial strategy.
Impact on Nigerians and fuel prices
For ordinary Nigerians, the immediate effect is indirect. While fuel at retail stations remains in naira, marketers who buy from Dangote Refinery may face higher costs if the naira weakens against the dollar. This could pressure pump prices upward, exacerbating living costs in a country already grappling with inflation. The development has reignited debate over whether a domestic refinery selling in dollars reduces or increases forex strain on the economy.
Dangote Refinery's role in Nigeria's fuel market
The Dangote Refinery, located in Lekki, Lagos, is Africa's largest, with a capacity of 650,000 barrels per day. It was built to curb Nigeria's reliance on imported refined products. Since operations began, it has supplied petrol, diesel, and aviation fuel locally while exporting some output. The refinery has also launched direct distribution initiatives using its logistics network. The impact of dollar-based sales will hinge on exchange rate trends, crude supply arrangements, production costs, and marketer pricing adjustments.
