THE renewed escalation of hostilities between the United States and Iran has triggered fresh turbulence in the global oil market, with crude prices rising sharply as traders react to fears of supply disruptions, renewed sanctions and growing risks around one of the world’s most important oil transit routes.
News Point Nigeria reports that the global market uncertainty has coincided with a major pricing shift by Dangote Petroleum Refinery, which has ended naira-based transactions for refined petroleum products and introduced a dollar-denominated pricing structure for petrol, diesel and aviation fuel.
The refinery has fixed the ex-depot price of Premium Motor Spirit (PMS), commonly known as petrol, at $0.779 per litre, marking a major departure from the naira payment arrangement that began after the commencement of the Federal Government’s naira-for-crude initiative on October 1, 2024.
The latest move represents a significant change in Dangote Refinery’s commercial operations and could reshape pricing dynamics in Nigeria’s deregulated downstream petroleum sector, where the facility has emerged as the country’s largest supplier of refined petroleum products.
The renewed US-Iran tensions have pushed global oil prices higher by between four and nine per cent, following escalating military exchanges and threats to restrict Iranian oil supplies.
One of the major concerns affecting the market is the security of the Strait of Hormuz, a critical maritime route through which about 20 per cent of global petroleum supplies pass.
Market analysts say renewed hostilities or possible disruptions around the waterway could create shipping challenges, forcing oil tankers to take longer routes or pay higher insurance premiums, thereby reducing the volume of crude reaching international markets.
The United States’ move to revoke temporary waivers on Iranian oil exports has also heightened concerns over future supply availability, reversing previous production increases that had helped stabilise the market during earlier stages of the conflict.
Traders have equally expressed concerns over declining global oil inventories, with fears of further supply disruptions triggering speculative buying and pushing spot prices higher.
Against this backdrop, Dangote Refinery announced a revised pricing structure for its petroleum products, with diesel now fixed at $1.087 per litre and Aviation Turbine Kerosene (ATK) priced at $0.942 per litre.
The refinery also fixed the price of coastal petrol supplies at $1,044.62 per metric tonne.
The new rates were contained in a notice issued to petroleum marketers and customers, stating that all previously issued naira-denominated Proforma Invoices and Deal Recaps for gantry and coastal transactions had become invalid.
The notice, signed by the refinery’s Group Commercial Operations, stated:
“Following our email on the 9th of July, 2026, regarding the transition from Naira to United States Dollars, please note that all issued Naira Coastal and Gantry PFIs/Deal Recaps are now invalid, and no payments should be made against them.
“The applicable USD prices for each product, effective today, July 13, 2026, are provided below.”
Under the revised pricing arrangement, petrol purchased through the refinery’s gantry will cost $0.779 per litre, diesel will sell at $1.087 per litre, aviation fuel at $0.942 per litre, while coastal PMS supplies will be priced at $1,044.62 per metric tonne.
The refinery, however, clarified that the transition to dollar payments does not affect Liquefied Petroleum Gas (LPG) transactions.
“Also note that this transition to USD does not apply to LPG transactions,” the company stated.
Findings indicate that the dollar-based pricing structure reflects Dangote Refinery’s latest commercial strategy and is designed to align product sales with the currency used in sourcing a significant portion of its crude oil supplies.
Sources familiar with the development said the refinery considered the adjustment necessary due to increasing disparity between the currency used for crude procurement and the currency in which refined petroleum products were sold domestically.
One source explained that Dangote Refinery now receives a larger proportion of its crude supplies from the Nigerian National Petroleum Company Limited (NNPCL) under dollar-denominated arrangements, while a substantial volume of refined products had continued to be sold in naira.
The source said the imbalance increased the refinery’s exposure to foreign exchange risks.
Explaining the rationale behind the decision, another source said:
“Dangote refinery is receiving fewer naira-denominated crude cargoes from NNPCL compared with dollar-denominated cargoes, while a larger volume of its petroleum products has been sold in naira.
“The resulting currency mismatch, combined with volatility in international crude oil prices and continued exchange-rate uncertainty, made it necessary to migrate product sales to dollars.”
The development is expected to have significant consequences for petroleum marketers who purchase products directly from the refinery for distribution across Nigeria.
Industry observers say the new pricing model could influence fuel prices in the downstream market, depending on foreign exchange movements, international crude prices, transportation costs, logistics expenses and marketers’ operating margins.
Dangote Refinery had earlier adopted naira-based transactions following the Federal Government’s domestic crude supply initiative, which was designed to provide local refiners with crude oil in naira, reduce pressure on foreign exchange demand and stabilise fuel prices.
However, the arrangement has faced challenges in recent months, with industry stakeholders reporting that a growing percentage of crude supplies had shifted back to dollar-based transactions.
The latest development highlights the continuing foreign exchange pressures facing Nigeria’s downstream petroleum sector despite efforts to strengthen local refining capacity and reduce dependence on imported petroleum products.
It also raises fresh questions about the long-term sustainability of the government’s naira-for-crude policy and its impact on domestic fuel pricing.
The new dollar benchmark will now serve as the reference price for marketers purchasing refined products directly from Dangote Refinery.
However, the final retail pump price of petrol will depend on prevailing exchange rates, logistics costs, transportation charges, regulatory fees and marketers’ operational expenses.
In recent months, petrol prices have continued to fluctuate due to changes in global crude prices, exchange rates and competition among suppliers, with industry stakeholders closely monitoring Dangote Refinery’s pricing decisions because of its growing influence on Nigeria’s fuel market.