Dangote Petroleum Refinery has shifted its refined petroleum product sales to a dollar-denominated pricing system, ending naira-based transactions previously adopted under the Federal Government’s naira-for-crude arrangement.
The refinery’s Group Commercial Operations announced the new pricing framework on Tuesday, invalidating all previously issued naira-denominated Proforma Invoices and Deal Recaps for gantry and coastal transactions.
Under the new structure, Premium Motor Spirit (PMS), popularly known as petrol, is priced at 0.779 dollars per litre for gantry sales, while coastal deliveries are priced at 1,044.62 dollars per metric tonne.
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Automotive Gas Oil (AGO), also known as diesel, is priced at 1.087 dollars per litre, while Aviation Turbine Kerosene (ATK) is set at 0.942 dollars per litre.
However, Liquefied Petroleum Gas (LPG) remains under the existing domestic payment arrangement and is not affected by the currency shift.
Industry sources attributed the development to challenges arising from currency mismatches in the refinery’s operations.
The sources explained that while the refinery obtains a significant portion of its crude supplies through dollar-denominated contracts, much of its refined products were being sold domestically in naira.
They said the situation exposed the facility to exchange rate risks, particularly amid fluctuations in global crude oil prices and movements in the foreign exchange market.
The adoption of dollar pricing, according to industry observers, is aimed at aligning the refinery’s revenue with the currency requirements for securing crude feedstock.
The development is expected to affect petroleum marketers, who will now require access to foreign exchange to purchase refined products directly from the refinery.
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Analysts said the new pricing model could make domestic fuel prices more responsive to changes in the naira-dollar exchange rate, regulatory charges and distribution costs.
The Dangote Petroleum Refinery, located in Lagos, is one of the world’s largest single-train refineries and was established to boost Nigeria’s refining capacity and reduce dependence on imported petroleum products.
