Nigeria's Dangote begins pricing local fuel sales in dollars, citing crude supply constraints

• Dangote set dollar prices at $0.779/liter for petrol, $1.087/liter for diesel, and $0.942/liter for aviation fuel at Africa's largest refinery with 700,000 barrels per day capacity
• The naira-for-crude programme launched in October 2024 aimed to reduce foreign exchange pressure, but limited crude allocations forced Dangote to import additional supply at international prices
• The refinery had been absorbing currency mismatches by selling in naira while sourcing crude in dollars, but inadequate supply under the government scheme made this arrangement unviable

Summary

Nigeria's Dangote Petroleum Refinery has switched to pricing fuel products in U.S. dollars for the domestic market, abandoning the naira-for-crude programme launched in October 2024. The programme originally allowed refiners to purchase crude in local currency to ease foreign exchange pressure.

Key Pricing:

• Petrol: $0.779 per litre
• Diesel: $1.087 per litre
• Aviation fuel: $0.942 per litre

Core Issue:

Dangote Vice President Edwin Devakumar cited insufficient crude supply under the naira-for-crude programme as the primary driver. While state-owned NNPC increased Dangote's allocation to seven cargoes monthly (up from five), the refinery requires 13-15 cargoes per month to operate efficiently. The shortfall forces Dangote to import crude at international prices in dollars, creating an unsustainable currency mismatch when selling products in naira.

Facility Details:

Africa's largest refinery boasts a 700,000 barrels-per-day capacity and has become a major domestic petrol supplier, reducing Nigeria's fuel import dependence.

Market Implications:

This dollar-pricing shift will likely increase demand for U.S. dollars among fuel marketers and expose domestic fuel prices to greater exchange-rate volatility. The move effectively reverses the currency relief the naira-for-crude programme intended to provide Nigeria's foreign exchange market.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has not yet commented on the pricing change. This development highlights ongoing challenges in Nigeria's petroleum sector despite infrastructure investments, with crude supply constraints undermining domestic refining economics.