Petrol jumps N113/litre after Dangote ends naira pricing

Private depot owners across Nigeria’s downstream petroleum sector raised loading prices for Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO) on Tuesday, with petrol jumping by N113 per litre and diesel increasing by N150 per litre, as marketers scrambled to reprice cargoes following Dangote Petroleum Refinery’s abrupt switch to dollar-denominated sales.

Data sourced by BusinessDay showed widespread upward adjustments across depots in Lagos, Port Harcourt and Warri, reversing weeks of relative price stability in the downstream market.

The increases came less than 24 hours after Dangote Refinery began invoicing gantry and coastal buyers of PMS, AGO and Aviation Turbine Kerosene (ATK) exclusively in U.S. dollars, ending the naira-based pricing regime it had maintained since October 2024 under the federal government’s naira-for-crude initiative.

Under the revised template, which the refinery says took effect Monday, ex-depot petrol is now benchmarked at $0.779 per litre, diesel at $1.087 per litre and aviation fuel at $0.942 per litre, with coastal PMS cargoes priced at $1,044.62 per metric tonne.

The refinery told marketers in a notice that all previously issued naira-denominated proforma invoices and deal recaps for gantry and coastal transactions were now void, and instructed customers to route new payments through the dollar framework.

Depot operators responded almost immediately by lifting their own loading prices, according to Tuesday’s report. Marketers said the repricing reflected both the currency shift and the cost of sourcing dollars in a foreign-exchange market that remains under pressure, even though the naira equivalent of Dangote’s new benchmark, converted at roughly N1,376 to the dollar, is broadly in line with prior ex-depot levels.

Traders said the gap between that theoretical parity and the sharper increases now showing up at private depots points to marketers building in a currency-risk premium ahead of further naira volatility.

As of 10:00 p.m. WAT, Brent crude traded at $86.03 a barrel, up 3.28 percent on the day, while West Texas Intermediate stood at $79.73, up 2.03 percent. The rally added to marketers’ calculus in setting loading prices, even though Dangote’s dollar benchmark, rather than crude’s daily swings, was the more immediate trigger for Tuesday’s adjustments.

Industry sources say the currency switch stems from a widening mismatch between how Dangote sources crude and how it has been selling refined products.

The refinery has increasingly had to import crude priced in dollars because allocations of naira-denominated crude from the Nigerian National Petroleum Company Limited have consistently trailed its roughly 650,000-barrel-a-day capacity, leaving it exposed to foreign-exchange risk while invoicing much of its output in naira.

One person familiar with the refinery’s operations said Dangote has been receiving only a fraction of the crude cargoes it requires monthly under the naira-for-crude arrangement, forcing heavier reliance on the international market.

Analysts caution that the shift ties pump prices more directly to swings in the naira, meaning any further depreciation could translate quickly into higher retail fuel costs, transport fares and, ultimately, consumer inflation.

The Nigerian National Petroleum Company Limited and the Petroleum and Natural Gas Senior Staff Association of Nigeria did not immediately respond to requests for comment. Dangote Refinery has not issued a public statement beyond its notice to marketers, which it said takes effect immediately across all gantry and coastal transactions, excluding sales of liquefied petroleum gas.