IPMAN slams depot owners for stockpiling product, FG, Dangote resume talks today
The Dangote Petroleum Refinery’s decision to suspend the sale of petroleum products in naira has sparked a chain reaction in the market. Some filling stations have started stockpiling Premium Motor Spirit (PMS), also known as petrol, in anticipation of a price hike. The cost of loading petrol at private depots in Lagos has already jumped to around N900/litre, up from less than N850/litre before the announcement.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has warned retailers to stop panic buying, as they may incur heavy losses if the price doesn’t rise as expected. IPMAN’s National Publicity Secretary, Chinedu Ukadike, advised marketers not to buy large volumes of petrol, as Dangote may crash the price, leading to significant losses.
The suspension of naira sales by Dangote refinery is attributed to a mismatch between its sales proceeds and crude oil purchase obligations, which are denominated in US dollars. The refinery had been selling petroleum products in naira, but the value of naira-denominated crude oil received was insufficient to cover its obligations.
Industry experts warn that the halt in naira sales could increase pressure on the foreign exchange market, as dealers will need to access US dollars to buy petroleum products. The development may also lead to a fuel crisis, with seven vessels carrying imported PMS expected to arrive at Nigerian seaports between March 17 and 23.
The Federal Government and Dangote refinery are reportedly resolving their misunderstanding, with the Technical Sub-Committee on the Naira-for-Crude Policy set to reconvene to deliberate on the matter. Stakeholders are awaiting an official statement on the resolution.
