A growing sense of unease is sweeping across Nigeria’s petroleum sector after Dangote Petroleum Refinery suspended the sale of petroleum products in naira, triggering concerns of a price hike.
As some filling stations began stockpiling Premium Motor Spirit (PMS), commonly known as petrol, industry players are bracing for what many believe could be an inevitable price increase.
The suspension, which followed the breakdown of the naira-for-crude oil deal between Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPCL), has left many in the sector scrambling. Marketers fear that the inability to continue transactions in naira could lead to even higher petrol prices, as they will now have to source U.S. dollars to procure fuel.
In response, independent marketers have been purchasing larger quantities of petrol, anticipating an imminent surge in prices. With the price of petrol at private depots in Lagos already spiking to around N900 per litre—up from just under N850 prior to the announcement—some filling station owners are rushing to stockpile in a bid to make a profit when prices increase.
However, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has urged caution, warning against panic buying that could result in significant financial losses.
IPMAN’s National Publicity Secretary, Chinedu Ukadike,criticized depot owners for profiteering, calling on marketers to avoid purchasing excess fuel, as the price may eventually be corrected once the naira-for-crude arrangement is resolved.
“Depot owners are capitalizing on the uncertainty created by the suspension, raising prices in anticipation of further hikes,” Ukadike explained. “But if the Dangote refinery resumes the naira-for-crude deal, those who stockpiled fuel may face severe losses as prices stabilize.”
The Federal Government and Dangote Refinery are reportedly engaged in discussions to resolve the issue and reinstate the naira-for-crude arrangement.
According to sources within the Ministry of Petroleum Resources and the Ministry of Finance have revealed that a technical committee will meet soon to explore possible solutions.
As the situation unfolds, experts warn that the ongoing crisis could put additional pressure on Nigeria’s foreign exchange reserves, as more dollars will be needed for fuel imports. This, in turn, may destabilize the naira and add to the already existing volatility in the currency market.
While Dangote Refinery’s suspension of the naira-based transactions is not expected to last long, the immediate effects are being felt across the petroleum industry, with implications for both the national economy and the everyday consumer.
The resolution of this issue may well determine whether Nigeria’s fuel prices will stabilize or face further upward pressure in the months to come.
