Dangote Refinery has shifted its fuel sales to U.S. dollars amid crude supply shortages and Nigeria’s worsening foreign exchange squeeze, raising fears of higher pump prices and increased pressure on the naira. The refinery, Africa’s largest, says it needs 13–15 crude cargoes monthly but receives far fewer from the Nigerian National Petroleum Company (NNPC), forcing it to import crude in dollars.
Nigeria’s downstream petroleum sector is facing fresh turbulence as the Dangote Petroleum Refinery ramps up fuel exports while shifting domestic sales to U.S. dollars. The move, triggered by persistent crude supply shortages and a tightening foreign exchange market, has sparked debate over the refinery’s role in stabilizing or destabilizing Nigeria’s energy economy.
According to reports, the refinery, with a capacity of 650,000–700,000 barrels per day, requires between 13 and 15 crude cargoes monthly to operate efficiently. However, allocations from the Nigerian National Petroleum Company Limited (NNPCL) have remained below that threshold, even after being raised from five to seven cargoes in May. This shortfall has forced Dangote to source additional crude from international suppliers, paid for in dollars.
The refinery had previously operated under the government’s naira-for-crude programme, introduced in 2024 to allow domestic refiners to purchase crude in local currency. The initiative was designed to ease pressure on Nigeria’s foreign exchange reserves and strengthen the naira. But Dangote executives say the limited crude volumes supplied under the scheme made the model unsustainable, especially as the refinery had been absorbing a currency mismatch by selling products in naira while sourcing crude in dollars.
On July 13, 2026, Dangote officially ended naira-based pricing, pegging petrol at $0.779 per litre, diesel at $1.087 per litre, and aviation fuel at $0.942 per litre. The decision immediately exposed Nigerian fuel marketers to dollar volatility, raising fears that retail prices could rise sharply if the naira weakens further.
Industry stakeholders, including the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), have warned that Nigerians may soon be forced to buy petrol and diesel in dollars unless the government intervenes. PETROAN President Billy Gillis-Harry urged authorities to restore the naira-for-crude deal, stressing that dollarisation of the downstream sector would worsen inflation and hurt ordinary citizens.
Despite the controversy, analysts note that Dangote Refinery has helped shield Nigeria from global fuel price shocks. Reports by S&P Global Commodity Insights indicate that the refinery’s pricing has capped domestic gasoline prices, limiting the ability of importers to pass on rising international costs to Nigerian consumers. Since May, Dangote has reduced ex-depot prices of petrol, diesel, and aviation fuel by significant margins, offering some relief to the market.
Still, the refinery’s reliance on dollar-denominated crude imports underscores Nigeria’s broader energy challenge: expanding refining capacity does not guarantee energy security if crude supplies remain constrained. With forex reserves under pressure and the naira struggling, the refinery’s dollar pricing could deepen Nigeria’s economic vulnerabilities even as it boosts export earnings.
The federal government has yet to issue an official statement on the refinery’s policy shift, but discussions are reportedly ongoing to renegotiate crude supply terms. For now, Dangote’s exports are rising, while domestic marketers brace for the ripple effects of dollar pricing in an already fragile economy.
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