Naira for Crude Suspension Raises Fuel Price Concerns as FG and Dangote Restart Talks
The suspension of naira sales for crude oil by the Dangote Petroleum Refinery has caused panic in Nigeria’s fuel market, with some filling stations stockpiling petrol in anticipation of a price increase. This comes as the Federal Government and Dangote resume negotiations today to resolve the issue.
Last week, Dangote Refinery halted its sale of petroleum products in naira, citing a mismatch between its sales proceeds and crude oil purchase obligations, which are in US dollars. As a result, the cost of loading petrol at private depots in Lagos surged from below ₦850 per litre to around ₦900 per litre.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has cautioned against panic buying, warning that marketers could suffer heavy losses if prices drop after the resolution of the crisis. IPMAN’s National Publicity Secretary, Chinedu Ukadike, accused depot owners of exploiting the situation to make profits.
“We are advising marketers not to buy too much fuel at high prices because if Dangote lowers prices later, they will face serious losses,” Ukadike said.
Meanwhile, sources from the Federal Ministries of Finance and Petroleum Resources confirmed that a technical committee would meet today to review options for restoring the naira-for-crude policy. The Nigerian Upstream Petroleum Regulatory Commission has been tasked with providing solutions to ensure crude availability for domestic refining.
Industry experts warn that the halt of naira transactions could put pressure on the foreign exchange market, as marketers will now need US dollars to buy petrol. Some analysts believe the government’s decision might be an attempt to curb Dangote Refinery’s growing influence in the fuel market, as its frequent price reductions have disrupted competitors.
Despite challenges, discussions between the Federal Government and Dangote Refinery are expected to yield a resolution soon, potentially reinstating the naira-for-crude agreement and stabilizing fuel prices.
