Key facts
- Dangote Petroleum Refinery is now pricing gasoline, diesel, and jet fuel in U.S. dollars.
- The switch is due to a shortage of Nigerian crude supplied through the naira-for-crude program.
- The refinery needs 13-15 crude cargoes per month but received only seven from NNPC in May.
- Gasoline is now priced at $0.779 per liter, diesel at $1.087 per liter, and jet fuel at $0.942 per liter.
- Fuel marketers will pay the naira equivalent of the dollar-denominated benchmark price.
Dangote Petroleum Refinery, Africa's largest, has begun pricing its domestic fuel products in U.S. dollars due to an inability to secure sufficient Nigerian crude. The refinery, with a capacity of 700,000 barrels per day, stated it is switching to dollar pricing for gasoline, diesel, and jet fuel after struggling to obtain enough barrels through Nigeria's naira-for-crude program. Gasoline is now set at $0.779 per liter, diesel at $1.087 per liter, and jet fuel at $0.942 per liter.
The refinery requires between 13 and 15 crude cargoes each month. In May, the state-owned Nigerian National Petroleum Company (NNPC) supplied only seven cargoes, an increase from approximately five in previous periods. This shortfall has compelled Dangote to purchase the remaining crude on the international market, where transactions are conducted in dollars.
Nigeria introduced the naira-for-crude initiative in 2024 with the aim of reducing pressure on the country's foreign exchange market by allowing domestic refiners to purchase Nigerian crude using naira. Dangote's shift to dollar pricing suggests the program is not adequately supplying the refinery. This situation places Nigeria in a difficult position, as the country exports over 1 million barrels of crude daily, yet its primary refinery still relies on imported oil for a portion of its processing needs.
The refinery's move means fuel marketers will pay the naira equivalent of the dollar benchmark price. This change directly links wholesale fuel prices to fluctuations in the exchange rate. Previously, the refinery absorbed the cost difference between purchasing crude in dollars and selling fuel in naira, an experiment now concluded by Dangote.