Some fuel retailers across Nigeria are reportedly stockpiling petrol after Dangote Petroleum Refinery suspended the sale of petroleum products in Naira.
Dangote Refinery announced last week that it had halted fuel sales in Naira due to a mismatch between its sales income and crude oil purchase obligations.
The 650,000 barrels of crude oil processing refinery explained that it had been selling fuel in Naira while buying crude in U.S. dollars. This imbalance made continued Naira sales unsustainable.
In response, depot owners in Lagos increased petrol loading prices from under N850 per litre to around N900. Many filling stations are now reportedly buying and hoarding fuel, expecting further price hikes.
Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), warned against panic buying.
“Depot owners are raising prices to profit from this situation. But we are advising marketers not to panic-buy because Dangote may reverse the price, leading to major losses,” he said.
Notwithstanding, some marketers continue stockpiling, believing prices will rise due to ongoing talks between Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPCL) over the Naira-for-crude deal.
The government has not yet made an official statement on the next steps.
Naira-for-Crude Talks Continue, Fuel Imports Increase
The federal government and Dangote Refinery are expectedly working on reviving the Naira-for-crude arrangement. A technical committee overseeing the policy is being set to reconvene to discuss possible solutions.
Meanwhile, Nigerian Port Authority data shows that seven fuel vessels carrying 154 million litres of imported petrol are expected to arrive between March 17 and 23. These imports are could help stabilize the market.
The refinery’s decision to stop naira sales is expected to increase pressure on Nigeria’s foreign exchange market. Marketers will need U.S. dollars to buy fuel, which could weaken the Naira. Industry analysts have also warned that Nigeria’s reliance on imported petrol could return if Dangote’s operations are disrupted for long.
The Dangote Refinery has faced difficulties securing crude oil domestically. Aliko Dangote previously accused international oil companies (IOCs) of frustrating local crude supply by insisting on selling through foreign agents at inflated prices.
In response to these issues, President Tinubu’s government approved a policy in July 2024 allowing local refineries, including Dangote’s, to buy crude oil in naira.
However, NNPCL’s forward sales of crude—used to secure loans from global institutions—have limited its ability to supply the refinery.
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