Africa’s Largest Oil Refinery Switches to US Dollar Pricing for Fuel Sales in Nigeria
Nigeria’s Dangote Petroleum Refinery, the largest oil refinery in Africa, has introduced a new pricing system that links the sale of refined petroleum products to the US dollar.
The move replaces the previous naira-based pricing structure and is aimed at managing foreign exchange risks associated with crude oil purchases, operational costs and international market fluctuations.
The refinery’s decision comes as it continues to navigate challenges in securing sufficient crude supplies through domestic channels, requiring some crude purchases to be made at international prices.
Under the new system, fuel marketers and buyers will pay for products using dollar-linked pricing, with the aim of creating greater stability for the refinery’s operations and reducing exposure to currency volatility.
Industry stakeholders have noted that while the shift may help the refinery manage foreign exchange pressures, it could also increase costs for local fuel marketers and consumers as exchange-rate movements influence final product prices.
The Dangote Refinery, located in Lagos, was developed to strengthen Nigeria’s energy security by reducing reliance on imported refined petroleum products.
With its large-scale refining capacity, the facility is expected to play a major role in meeting domestic and regional fuel demand.
The introduction of dollar-based pricing represents a significant change in Nigeria’s downstream oil sector and highlights the ongoing challenges of balancing local fuel affordability with the realities of global energy markets.
