Fuel Prices Jump Over ₦100/Litre as Dangote Refinery Switches to Dollar Sales

Fuel Prices Jump Over ₦100/Litre as Dangote Refinery Switches to Dollar Sales

Lagos, Nigeria — Nigerians are bracing for another increase in fuel prices after Dangote Petroleum Refinery officially switched the sale of Premium Motor Spirit (PMS), diesel, and aviation fuel from naira to U.S. dollars for marketers.

The policy change has already pushed depot prices up by more than ₦100 per litre, with petrol rising from about ₦1,137 to ₦1,250 per litre in several depots. Diesel prices have also surged, reaching as high as ₦1,650 per litre in some locations.

According to industry estimates, petroleum marketers will now need approximately $1.84 billion every month to purchase petrol, diesel, and aviation fuel from the refinery. Experts warn the move could increase pressure on Nigeria's foreign exchange market, weaken the naira, and trigger further increases in pump prices if exchange rates or global crude oil prices continue to rise.

The refinery announced that all gantry transactions for PMS, diesel (AGO), and aviation fuel (ATK) will now be settled in U.S. dollars, while Liquefied Petroleum Gas (LPG) remains under the existing payment arrangement.

Energy analysts say the decision reflects the commercial realities of sourcing a significant portion of crude oil from international markets, where transactions are conducted in dollars. However, marketers argue that buying fuel in dollars while selling in naira exposes them to exchange-rate risks and higher financing costs.

Several economists believe the change effectively transfers the foreign exchange burden from the refinery to downstream marketers and, ultimately, Nigerian consumers. They also warn that domestic fuel prices will now respond more quickly to fluctuations in both the naira-dollar exchange rate and international crude oil prices.

Industry stakeholders have also raised concerns about the future of the Federal Government's naira-for-crude initiative, which was introduced to reduce pressure on the foreign exchange market and support local refining.

With crude oil trading around $85 per barrel, analysts expect fuel prices to remain volatile in the coming weeks unless there is improved foreign exchange liquidity and stable crude supply.

The development marks another major turning point in Nigeria's deregulated petroleum market, with businesses, transport operators, manufacturers, and households expected to feel the impact of rising energy costs.

>>> What are your thoughts on Dangote Refinery's decision to sell fuel in dollars? Do you think it will strengthen the market or place an even heavier burden on Nigerians? Share your opinion in the comments, and don't forget to share this update with others.