Nigeria’s Dangote Petroleum Refinery, Africa’s largest, has introduced a new pricing system linking the sale of its refined petroleum products to the US dollar, replacing its previous naira-based structure.

The move is aimed at managing foreign exchange risk tied to crude oil purchases, operating costs and international market swings, as the refinery continues to navigate challenges securing sufficient crude through domestic channels — requiring some purchases to be made at international prices. Under the new system, fuel marketers and buyers will pay using dollar-linked pricing, which the refinery says should bring greater operational stability and reduce its exposure to currency volatility.

Industry stakeholders note that while the shift may help the refinery manage foreign exchange pressures, it could also raise costs for local fuel marketers and consumers as exchange-rate movements feed into final product prices. Located in Lagos, the refinery was built to strengthen Nigeria’s energy security by cutting reliance on imported refined products, and the introduction of dollar-based pricing marks a significant shift in the country’s downstream oil sector.

Source: (angolanminingoilandgas.com)