Fresh fuel price hike likely as Dangote refinery suspends petrol sale in naira

Fresh fuel price hike likely as Dangote refinery suspends petrol sale in naira

Petroleum products marketers have predicted a potential shake-up in the downstream sector as Dangote Refinery halts the sale of petrol in naira.

The marketers, while expressing shock over the development, said there are genuine concerns over supply chain disruptions and impending price hikes.

Stakeholders fear the ripple effects may deepen economic pressures on businesses and consumers nationwide.

Dangote Refinery, in a statement, said the move was necessary to avoid a mismatch between its sales proceeds and our crude oil purchase obligations, which are currently denominated in US dollars.

“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.

“Our attention has also been drawn to reports on the internet claiming that we are stopping loading due to an incident of ticketing fraud. This is malicious falsehood. Our systems are robust and we have had no fraud issues.

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“We remain committed to serving the Nigerian market efficiently and sustainably. As soon as we receive an allocation of naira-denominated crude cargoes from NNPC, we will promptly resume petroleum product sales in naira. We appreciate your understanding and cooperation during this period”, the company explained.

Commenting on the development, the National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Mr. Billy Gillis-Harry, expressed rude shock at the development, saying the decision by Dangote will impact petroleum products  availability, energy security and pricing.

He said the coming onboard of the Dangote Refinery has been able to stabilise the supply chain while guaranteeing access to product.

However, he warned the suspension of petroleum products into the sldomestic market by Dangote should not be an excuse for importers of products to profiteer by putting the country in a disadvantage condition.

He argued that PETROAN has been at the forefront of canvassing for multiple sources of products for the market, saying the entry of Dangote refinery into the downstream market was received with so much joy.

Gillis-Harry further lamented that the business decision of Dangote to sell his products in dollars has automatically shut out the local market from the business equation because domestic pricing and sales of petroleum products is in naira. On October 1, 2024, the federal government officially announced the commencement of crude oil sale to Dangote Refinery and other local refineries in the local currency.

The move was to reduce the pressure on the foreign reserves and ensure the stability of the local currency.

 

Fresh fuel price hike likely as Dangote refinery suspends petrol sale in naira