Why Dangote Refinery may revert to fuel sales in naira as FG opens talks

The Federal Government has entered high-level negotiations with the Dangote Petroleum Refinery to reverse its recent switch to dollar-denominated sales for petroleum products. Sources say the talks aim to restore naira-based pricing by increasing crude oil supplies under a naira-for-crude arrangement.

Government agencies join forces to find a solution

Senior industry sources disclosed that the Nigerian National Petroleum Company Limited (NNPCL), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) are jointly engaging Dangote Refinery. The discussions are focused on addressing the challenges that prompted the refinery to adopt dollar pricing earlier this week, according to a report by PetroleumPriceNG.

One source, who requested anonymity because of the sensitivity of the negotiations, said both the government and the refinery recognise that restoring the naira-for-crude model remains the most sustainable path for Nigeria's downstream petroleum sector.

"The government understands the implications of the refinery's dollar pricing policy. Discussions are progressing towards increasing crude oil supplied in naira, while the refinery is willing to return product sales to naira once that framework is firmly established," the source said.

Why Dangote switched to dollar sales

The refinery recently announced that Premium Motor Spirit (PMS), Automotive Gas Oil (AGO), and Aviation Turbine Kerosene (ATK) would now be sold in US dollars. Industry insiders said the decision was driven by changes in the refinery's crude procurement structure, with a larger share of crude now being purchased in dollars.

Meanwhile, many refined products were still being sold locally in naira, exposing the company to significant foreign exchange losses. To reduce this currency mismatch and manage growing exchange rate risks, the refinery aligned its product sales with its dollar-denominated crude purchases.

Impact on fuel prices across Nigeria

Although Dangote Refinery has maintained its official PMS gantry price at $0.779 per litre, the impact of dollar pricing has already filtered through the market. Market intelligence indicates that the effective domestic benchmark has climbed to around N1,200 per litre, roughly N125 higher than the refinery's previous naira-equivalent benchmark.

Across Lagos, Port Harcourt, Warri and Calabar, marketers have adjusted ex-depot prices to between N1,190 and N1,230 per litre, reflecting the growing influence of the new pricing model.

Industry stakeholders believe a successful outcome from the ongoing negotiations could help stabilise fuel prices, ease foreign exchange pressures on marketers, and restore confidence in the downstream petroleum market. However, sources cautioned that no final agreement has been reached. Talks are expected to continue as both the Federal Government and Dangote Refinery work toward a commercially viable arrangement that guarantees sustainable crude supply while protecting the refinery's operational efficiency.

Legit.ng earlier reported that Dangote Refinery released a fresh price list after officially ending naira-denominated sales for marketers, introducing a new US dollar pricing regime for major fuel products. The new policy, which took effect on Monday, July 13, 2026, requires marketers purchasing products through gantry and coastal loading to make all payments in US dollars.

For Nigerian consumers and businesses, the outcome of these talks will determine whether fuel prices ease back to naira-based levels or remain tied to the dollar, with direct consequences for transport costs and inflation.