Naira-for-Crude Suspension: Marketers Fear Price Hike as FG, Dangote Resume Talks

The suspension of the sale of petroleum products in naira by the Dangote Petroleum Refinery has sparked fears of a price hike among marketers. The refinery’s decision was made due to a mismatch between its sales proceeds and crude oil purchase obligations, which are denominated in US dollars.

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has warned depot owners against profiteering from the situation, while advising marketers not to panic-buy. “Some depot owners are already increasing the price. But we are also asking our marketers not to panic-buy. Because definitely when the Dangote refinery comes back and reverses the price, it will be a huge loss for these marketers,” said Chinedu Ukadike, IPMAN’s National Publicity Secretary.

The Federal Government and Dangote refinery are set to resume talks today to resolve the issue. The Technical Sub-Committee on the Naira-for-Crude Policy will reconvene to deliberate on the matter, with the Nigerian Upstream Petroleum Regulatory Commission mandated to come up with options for review.

Industry experts have warned that the halt in naira sales by the Dangote refinery could increase pressure on the foreign exchange market, as dealers would now have to access US dollars in large amounts to buy petroleum products.The development has also raised concerns about the potential impact on fuel prices. “There could be pressure on the naira, and it would lose the stability it had gained lately,” said Hammed Fashola, National Vice President of IPMAN.

The naira-for-crude deal was introduced to support local refineries, including the Dangote refinery, which has been producing fuels at a lower price than imported ones. However, the suspension of the deal has sparked concerns about the potential for price hikes and fuel scarcity.

Stay tuned for updates on this developing story!