Dangote Refinery Raises $750 Million in Debut Eurobond Ahead of Planned IPO
• Issue priced at 7.5%, matching Nigeria’s sovereign curve
•Refinery cuts fuel prices again, signals further moderation
• Says refinery absorbed global oil price surge
•Insists product pricing cannot mirror daily movements in oil prices
Emmanuel Addeh in Abuja
The Dangote Petroleum Refinery has successfully raised $750 million through its debut Eurobond, marking another milestone in the group’s efforts to diversify its funding sources and strengthen its balance sheet ahead of an anticipated public listing.
According to a report by Eurobond.Africa, the five-year dollar-denominated bond, due in July 2031, was priced at par to yield 7.50 per cent through a Rule 144A private placement targeted at Qualified Institutional Buyers (QIBs) in the United States and other international markets.
The publication noted that the transaction followed the same funding strategy adopted by Dangote Fertiliser in April, when the company raised $750 million through a five-year Eurobond priced at 7.75 per cent.
It described the refinery’s latest fundraising as evidence of growing investor confidence in Dangote Group’s export-oriented businesses and a sign that international investors are increasingly distinguishing strong Nigerian corporate credits from broader sovereign risk.
According to Eurobond.Africa, the refinery’s bond includes a make-whole call provision at US Treasury yields plus 50 basis points until July 16, 2028, a structure designed to protect investors while giving the company flexibility to refinance or retire the debt as operations expand and cash flows improve.
It stated that the refinery’s ability to price the bond 25 basis points below the Dangote Fertiliser issuance completed barely three months earlier reflected improved market perception of the project, particularly following operational progress that has seen refining capacity approach 700,000 barrels per day during test runs.
The pricing, it explained, was especially significant because it was broadly in line with yields on Nigeria’s sovereign Eurobond curve, suggesting that investors viewed the refinery as a premium corporate credit despite operating in Nigeria.
Besides , it emphasised that the latest issuance brings Dangote Group’s total international debt raised this year to $1.5 billion, following the earlier fertiliser transaction.
It said the company was using the proceeds to optimise its debt profile by replacing shorter-term and more expensive local bank facilities with longer-tenor, fixed-rate dollar debt maturing in 2031.
According to the report, the strategy is aimed at presenting a stronger balance sheet as the conglomerate prepares for a major equity fundraising cycle.
The publication said the group was entering what it described as a $40 billion expansion phase, with plans for a secondary listing of Dangote Cement in London around September as well as a dual-listing initial public offering (IPO) for the Dangote Petroleum Refinery.
Eurobond.Africa stated that successfully securing long-term international funding ahead of those planned listings would improve the group’s financial position and enhance its appeal to global equity investors.
The report also highlighted the role of an international syndicate comprising JPMorgan, Bank of America Merrill Lynch and Standard Chartered in executing the transaction.
The successful placement, according to the report, demonstrated sustained international appetite for high-quality African industrial assets despite global market uncertainties and positioned the Dangote Group for what could become one of the largest equity listings in African capital markets.
Meanwhile, the Dangote Refinery has announced another reduction in the ex-depot price of petrol, saying it marked its fourth price cut within a month. The company said it continues to pass lower production costs to consumers despite still processing crude oil purchased at significantly higher international prices.
The latest N50 per litre reduction, according to the company, brings the cumulative decrease in the refinery’s PMS ex depot price to N200 per litre since May 30, 2026, reducing the gantry price to 1,075.
Over the same period, the refinery said it has reduced the ex-depot price of Automotive Gas Oil (AGO) by N300 per litre and Jet A1 aviation fuel by N520 per litre.
The company said the successive reductions demonstrate its commitment to ensuring Nigerians benefit from favourable market developments while maintaining the long-term sustainability of domestic refining operations.
In a statement yesterday, the refinery explained that petroleum product pricing cannot mirror daily movements in international crude oil markets because crude is purchased weeks, and sometimes months, before it is processed. According to the refinery, the petroleum products currently being supplied to the market are being produced from crude inventories acquired during periods of substantially higher prices.
It disclosed that the average landed cost of crude processed stood at approximately $124.80 per barrel in May and $95.25 per barrel in June, compared with the current international benchmark of about $71.01 per barrel.
The refinery also clarified that its crude procurement costs are not based solely on the headline ICE Brent benchmark commonly quoted in the media. Rather, it explained that crude is purchased on a Dated Brent basis together with applicable market premiums, freight and logistics costs, resulting in actual feedstock costs that differ materially from benchmark prices.
Despite the sharp increase in crude acquisition costs during the period, Dangote Refinery said it deliberately refrained from transferring the full impact to consumers, choosing instead to absorb a significant portion of the additional costs in order to support market stability and cushion Nigerians from the volatility in global energy markets.
The company noted that this pricing approach has helped to keep petroleum product prices in Nigeria below those prevailing in neighbouring countries, even after accounting for applicable taxes. It added that as lower priced crude cargoes progressively enter its production cycle, the refinery has begun systematically passing the benefits to the market through phased price reductions.
“Today’s N50 per litre reduction is the fourth price cut in one month, bringing cumulative reductions to above N200 per litre on PMS. This approach ensures that pricing decisions are anchored on actual production economics and inventory costs rather than short term fluctuations in international oil markets.
“Nigeria today benefits from the stabilising role of domestic refining capacity. The Dangote Petroleum Refinery currently supplies volumes sufficient to meet national demand, helping to strengthen energy security, eliminate dependence on imports, conserve foreign exchange and provide greater price stability for consumers and businesses,” the company stated.
The company expressed confidence that if international crude prices remain favourable and lower cost feedstock continues to replace higher priced inventories, Nigerians should expect further moderation in petroleum product prices.