Market News

Following the uncertainty surrounding the country’s downstream petroleum sector over the dollarisation of fuel sale and other challenges, the Lagos Chamber of Commerce and Industry (LCCI) has disclosed that the practice will place additional pressure on Nigeria’s foreign exchange market and could further weaken the naira.

The President of Lagos Chamber of Commerce and Industry, Engr. Leye Kupoluyi, who stated this in an interview with New Telegraph in Lagos, said that this trend raised concerns about rising operational costs within the downstream petroleum sector.

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Kupoluyi said: “We urge the relevant authorities to promote naira-denominated transactions within the domestic petroleum value chain and engage industry stakeholders to develop policies that safeguard exchange rate stability and support macroeconomic resilience.”

Speaking on LCCI’s call for more action in price regulation, the Chamber’s boss explained: “We call on the Federal Competition and Consumer Protection Commission (FCCPC) to be more vigilant on the price regulatory environment.

“We have had cases where oil marketers raised pump prices in line with international crude oil prices, but held on to current prices when international prices fell. We need to study the dynamics at play and secure the best deal for consumers and businesses.

“There are also cases of price-fixing by local airlines during peak festive seasons. We are not calling for price control but for price regulation in line with international best practices.”

While reacting to the asymmetric adjustment of domestic petrol prices, the LCCI chieftain stressed: “Businesses and consumers continue to express concern over the persistent asymmetry in domestic petrol pricing, where increases in international crude oil prices are promptly reflected in local pump prices.

At the same time, corresponding decreases are rarely passed on to consumers. “This raises concerns about market transparency, pricing fairness, and consumer protection.

We call on the Federal Competition and Consumer Protection Commission (FCCPC), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), and other relevant agencies to strengthen oversight of pricing mechanisms, ensure greater transparency, and protect consumers from exploitative market practices.” On ECOWAS approvals of the Nigeria-Morocco gas pipeline, Kupoluyi said: “With the 1,130 Being the current minimum pump price of premium motor spirit approval of ECOWAS for the construction of a gas pipeline linking Nigeria to Morocco, the roughly 6,000-kilometer (3,700-mile) NigeriaMorocco Gas Pipeline (NMGP), crossing 13 countries along Africa’s Atlantic coast, paves the way for Nigeria to explore its gas resources for maximum foreign exchange earnings, serving Europe and Africa.

“This is an investment worth making to further diversify our oil and gas revenue beyond oil alone. Amid geopolitical tensions in the Middle East and disrupted supply chains, the cut in gas supply from Russia to Europe, Nigeria must take this opportunity to become Europe’s major gas supplier.

In funding the project, the government should make room for private-sector participation to enhance its management and profitability.”

In a swift reaction to the dollar-denominated transactions in the petroleum sector, petroleum products retailers and marketers said Nigerians may soon begin buying Premium Motor Spirit, PMS, Automotive Gas Oil, AGO, and other refined petroleum products in United States dollars if the Federal Government does not restore the Naira-for-crude deal with Dangote Refinery.

The National President of the Petroleum Products Retail Outlets Owners Association of Nigeria, PETROAN, Billy Gillis-Harry, disclosed this in an interview.

Recall that recently, Dangote Refinery resumed the sale of refined petroleum products in US dollars. The refinery’s decision signalled the suspension of the Naira-for-crude deal, which enables off-takers to purchase refined petroleum products from the 700,000-barrel-per-day plant in naira.

Days after Dangote Refinery’s pricing shift to the US dollar, the federal government had yet to officially comment on the matter. However, there are speculations that the Federal Government has initiated talks with Dangote Refinery to restore the Naira-for-crude deal.

Reacting, Gillis-Harry said discussions on the Naira-for-crude deal should be concluded promptly so that ordinary Nigerians do not suffer the consequences.

According to him, the Federal government’s intervention would protect Nigerians from the adverse impact of global energy price shocks. “Nigerians may start buying petrol in US dollars if the Federal Government does not intervene in the Naira-for-crude deal with Dangote Refinery.

Oil& Gas “We hope the downstream oil sector will not be dollarised to that extent,” he said. Recall that depot owners and marketers had earlier raised the ex-depot and retail prices of petrol and diesel.

Currently, petrol sells for between N1,155 and N1,220 per litre, while diesel sells for between N1,700 and N1,800 per litre in Abuja and its environs.