As of Monday, July 20, 2026, Nigeria’s downstream petroleum sector is facing significant uncertainty and price instability, with depot prices for Premium Motor Spirit (PMS) climbing to between ₦1,200 and ₦1,350 per litre.
This sharp rise follows the decision by Dangote Petroleum Refinery to transition to a dollar-denominated pricing framework, which has fundamentally altered the cost structure for marketers and distributors across the country.
The Impact of Dollar-Based Pricing
The recent shift by the Dangote Refinery to peg its ex-depot prices to the US dollar—setting petrol at $0.779 per litre—has eliminated the previous naira-denominated arrangement. At the prevailing official exchange rate of approximately ₦1,380.50 per dollar, this benchmark translates to roughly ₦1,075 per litre before additional costs such as transportation, depot margins, and regulatory charges are applied.
Industry stakeholders, including the Independent Petroleum Marketers Association of Nigeria (IPMAN), have noted that this move has created a ripple effect throughout the private depot network. With many depots now quoting prices as high as ₦1,250 to ₦1,350 per litre, independent marketers have been forced to pause fresh purchases, leading to localized supply disruptions at various filling stations.
Why Prices Are Rising
Several factors are currently converging to keep pump prices high and volatile:
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Currency Mismatch: The refinery’s transition to dollar pricing is a response to the increased cost of procuring crude oil feedstock in dollars, making naira-denominated product sales unsustainable for the facility.
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Import Costs: With the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) issuing new import licences for the third quarter of 2026, importers have cited rising costs of imported cargoes—partly linked to international shipping disruptions—as a reason for raising their own depot prices.
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Market Uncertainty: The suspension of fuel loading at the Dangote Refinery has created a supply bottleneck, forcing marketers to rely on private depots where prices are significantly higher.
Outlook for Motorists
While there is no official fuel scarcity, the current environment of price fluctuation means that consumers are seeing inconsistent pricing at the pump. Marketers are warning that if the disruption at the Dangote Refinery persists and depot prices remain at these elevated levels, retail prices will inevitably reflect these higher costs.
Motorists are advised to remain alert to local price adjustments and avoid panic buying, as industry watchers continue to monitor the resumption of loading operations at the Dangote Refinery, which remains the key factor in determining the next direction for domestic fuel prices.
