Reports indicate that some filling stations have begun stockpiling Premium Motor Spirit, otherwise known as petrol following Dangote Petroleum Refinery’s suspension of the sale of petroleum products in naira.
It was gathered that retailers are storing the fuel in anticipation of price increase, expecting costs to go up due to the Federal Government’s decision to stop selling crude oil to Dangote Refinery in local currency.
However, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has warned against panic buying, stressing that retailers could suffer significant losses.
Recall that last week, the Dangote refinery announced that it had temporarily halted the sale of petroleum products in naira as the naira-for-crude talks between it and NNPCL appeared fruitless.
The 650,000 barrels per day capacity refinery expressed concerns over a mismatch between its sales proceeds and its crude oil purchase obligations, which it said are currently denominated 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 firm announced.
Meanwhile, immediately after the announcement, the cost of loading petrol at private depots in Lagos skyrocketed to about N900/litre as against the less than N850/litre it sold before the announcement.
However, sources from the Federal Ministry of Finance and the Federal Ministry of Petroleum Resources had earlier revealed that the Technical Sub-Committee on the Naira-for-Crude Policy would reconvene today (Monday) to deliberate on the matter.
According to reports, the committee had mandated the Nigerian Upstream Petroleum Regulatory Commission to come up with options that would be reviewed by the panel as it struggles to return the naira-for-crude deal.
Sources familiar with the workings of the naira-for-crude, who confirmed that the transaction would not be called off permanently, disclosed that NNPCL had issues with crude availability.
Meantime, industry experts and oil marketers warned that the halt in naira sales by the Dangote refinery could increase the pressure on the foreign exchange market, as dealers would now have to access the United States dollars in large amounts to buy petroleum products.
