With the Dangote Petroleum Refinery halting sale of petroleum products in naira, some filling stations have begun hoarding petrol in anticipation of a price hike.
The move comes as the Federal Government has yet to resume crude oil sales to the refinery in local currency, raising concerns about the potential impact on pump prices.
However, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has cautioned against panic buying, warning that retailers hoarding fuel could suffer significant losses if prices drop unexpectedly.
Last week, the Dangote refinery announced a temporary suspension of naira transactions, citing difficulties in matching its sales revenue with its crude oil purchase obligations, which are currently priced in US dollars.
“Dear valued customers, we wish to inform you that the Dangote Petroleum Refinery has temporarily halted the sale of petroleum products in naira. This decision is necessary to avoid a mismatch between our 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,” the refinery stated.
Following the announcement, the cost of petrol at private depots in Lagos surged from below ₦850 per litre to approximately ₦900 per litre.
IPMAN’s National Publicity Secretary, Chinedu Ukadike, decried that depot owners were exploiting the situation, increasing fuel prices as demand spiked.
“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, he told Punch.
“Depot owners are using this opportunity to profiteer. This is not good for the economy.
“Some marketers are also stockpiling PMS in a bid to increase the price based on the suspension of naira sales by the Dangote refinery.
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“They speculate that the price will go higher and they will make more money from the fuel they are buying now. It may not be so. This issue will be resolved,” Ukadike said.
He urged marketers to exercise caution, warning that hoarding large volumes at inflated prices could lead to financial ruin.
“We, the independent marketers, are asking our members not to buy so much goods because when they buy so much volume of fuel at a higher rate from the depot owners, at the end of the day, it might result in losing a lot of capital.
“Dangote may crash the price, and most of them with high volumes of PMS will run into problems. So, all marketers should be careful to avoid losses,” he advised.
Ukadike also revealed that discussions between the Federal Government and the Dangote refinery were progressing to reinstate crude oil sales in naira.
“I have gathered that the Federal Government and Dangote refinery are almost resolving this matter.
“The two of them are reviewing the naira-for-crude deal to continue the sale of crude oil in naira to the refinery again. But the official statement has not come out. We are waiting for the official statement,” he said.
Sources familiar with the failed naira-for-crude deal blamed the Nigerian National Petroleum Company Limited (NNPCL) for tying up future crude sales in financial deals, leaving little supply for domestic refining.
NNPCL spokesperson Olufemi Soneye disclosed that talks were ongoing to renew the naira-for-crude arrangement, as the initial phase of the deal, which started in October 2024, was set to expire this month.
Since October, the Dangote refinery has reportedly received 48 million barrels of crude from the NNPCL.
The decision to suspend naira sales has sparked speculation that some industry players aim to curb the Dangote refinery’s growing influence. Critics argue that the move could be an attempt to undermine local refining efforts and revive full-scale fuel importation.