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Petrol marketers have expressed fears that the pump price of the commodity may shoot up in the coming days following Dangote Refinery's decision to halt the sale of petroleum products to the Nigerian market.
The indigenous refinery announced on Tuesday, March 18, 2025, that it will no longer supply petrol to the local market, citing the collapse of its naira-for-crude deal with the Nigerian National Petroleum Company (NNPC) Limited.
The announcement followed a series of discussions between Dangote Refinery and the national oil company over a possible renewal of the six-month crude-for-naira deal.
The old agreement, which will cease to be valid next month, was reportedly terminated by the NNPCL a fortnight ago, as negotiations between both parties ended in a deadlock on Tuesday.
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“We wish to inform you that 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 U.S. dollars," Dangote said in a statement.
“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 a malicious falsehood. Our systems are robust, and we have had no fraud issues.
“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.”
Marketers predict a petrol price hike
Meanwhile, the Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, IPMAN, Chief Chinedu Ukadike, has predicted an increase in petrol prices following Dangote's announcement.
He explained that the pump price would likely go up due to the cost of sourcing foreign exchange to pay for the product.
He also envisaged that marketers may resort to selling their petrol stock in dollars as the currency has now become the means of exchange in Nigeria.
“The pressure on dollar will increase because it has become the means of exchange. Marketers will begin to sell petrol at filling stations in dollars. And this will have negative impact on the prices of petroleum products across the country," Ukadike told Vanguard.
“We don’t want to cause panic in the energy industry but what we are seeing now is not encouraging. Any increase in cost will be passed on to consumers eventually,” he stated.
Recall that the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, had last week said that the naira-for-Crude deal between NNPC Limited and Dangote Refinery remained intact and has not been canceled.
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“Government is not canceling it. What was taken to council was a pilot scheme where they said NNPC should be selling crude in Naira to Dangote Refinery. We’ve always encouraged people to buy crude in whatever currency. Even if you buy in Naira, it’s going to be at a prevailing exchange rate," the Minister was quoted as saying.
However, Ukadike said marketers were informed that the crude-for-naira deal ended March 1, 2025, contrary to government officials' claims.