Petrol Prices Surge After Dangote Refinery Dollar Policy

Petrol prices in Nigeria have risen sharply due to Dangote Refinery's new policy to sell refined petroleum products in U.S. dollars instead of naira. This change took effect on Tuesday, resulting in a nine percent increase in ex-depot prices for petrol, with prices rising to N1,141 per liter at Optima, N1,230 at Matrix in Warri, N1,121 at Aiteo, and N1,170 at Rainoil in Delta.

The refinery's decision to adopt a dollar-denominated pricing system was influenced by a mismatch in foreign exchange and the need to secure a larger share of crude oil sales in dollars. The new pricing structure sets the ex-depot price for petrol at $0.779 per liter, diesel at $1.087 per liter, and aviation fuel at $0.942 per liter.

The increase in depot prices is attributed to rising global crude oil prices and geopolitical tensions, particularly involving the U.S. and Iran. This shift is expected to exert inflationary pressure on transport costs and household expenses across Nigeria.