Market News

By Abdullateef Aliyu, Lagos

ByAbdullateef Aliyu, Lagos

Fri, 21 Mar 2025 3:50:12 WAT

There is anxiety over fuel price following Wednesday’s announcement by Dangote Refinery that it is suspending the sale of petroleum products, Daily Trust can report.

The development is fueling panic buying at some filling stations with marketers warning against such even as fuel prices remain stable, according to checks by our correspondent at some filling stations yesterday.

Dangote Refinery had on Wednesday confirmed suspending the sale of its products comprising PMS, diesel and Jet fuel in naira.

According to it, “This decision is necessary to avoid a mismatch between our sales proceeds and our crude oil purchase obligations, which are currently denominated in U.S. dollars.” 

In a message to its customers, Dangote Refinery said, “To date, our sales of petroleum products in Naira have exceeded the value of Naira-denominated crude we have received. As a result, we must temporarily adjust our sales currency to align with our crude procurement currency.”

Daily Trust reports that the development was due to the collapse of the naira-for-crude deal between it and the Nigerian National Petroleum Company Limited (NNPCL).

The arrangement, which started in October 2024 was for an initial period of six months ending by the end of March but the implementation was faced with a series of challenges over low supply.

Marketers and experts who spoke with our correspondent expressed concerns that the development could trigger a fresh increment in PMS and other products as the prices would now be dollarised.

National Publicity of the Independent Petroleum Marketers’ Association of Nigeria (IPMAN), Chinedu Ukadike in a chat with Daily Trust yesterday expressed optimism that the federal government would resolve its issue with Dangote to enable it resume the sale of its products in naira.

He warned that if the marketers begin to buy fuel in dollars, they might be forced to also sell in dollars; the development, which would put massive pressure on dollars. 

He disclosed that already some tank farms had started increasing their products to independent marketers when NNPC and Dangote had not increased their prices.

He said, “We the independent marketers are patiently watching the scenario and also patiently watching Dangote and the FG in resolving this issue of Naira to crude which will definitely help us and stabilise the economy, some tank farm owners have started increasing prices of petroleum products in their tank farms but we the independent marketers are appealing to our marketers to not engage in panic buying because any moment from now this issue will be resolved and normal sales will be returned.

“Dangote has not increased his products neither the NNPC, the unnecessary and unwarranted increase by these tank farm owners to retail outlets is uncalled…

“We are hopeful that within a few days this issue will be resolved because if they sell fuel to us in dollars that means we sell fuel to our customers in dollars too, because that pressure cannot be passed to us, we will also pass it to the final consumers.

“It means the dollar has been localized as a legal entity in Nigeria, there will be acceleration in prices, instead of prices going down it will be going up because the Chad for dollar by so many people will be there and people will now start trading in dollars.”

“Look at now, the dollar was at around N1400 some weeks ago, now it’s almost N1550 and tomorrow speculators will take it to N1600, it is an artificial increase.”

Professor of Energy Law, Yemi Oke asked the federal government to immediately intervene to avert a price increase.

He said, “The reality is that with the policy Dangote just brought out, it means PMS price would naturally go up unless the federal government intervenes and directs the continued sale of crude to Dangote in naira. That is the only way Dangote can hedge against price volatility with the exchange rate.

“The dollar would also go up. It climbed from about 1,300 to N1,500 and that is an indication that the PMS price might also go up.”

He stated that NNPC is also a growing concern as a limited liability company mandated to also make money like other national oil companies and also it is competing with Dangote.

According to him, by the time Nigeria has more refineries, prices of PMS would go down. “But for now, it is still a kind of hide and seek game between Dangote Refinery and NNPC and it is only the federal government that can stem the tide to address this for and in the interest of Nigeria,” Oke said.