Indications have emerged that the temporary relief enjoyed by motorists and other fuel consumers as a result of marginal drop in fuel prices may be over within the next few days following the breakdown of talks between the managements of Dangote Refinery and Nigerian National Petroleum Company Limited (NNPCL) on naira-for-crude sale had collapsed.
Following the deadlock in the talks, Dangote Petroleum Refinery has temporarily halted the sales of petroleum products in naira.
As expected, the announcement of the halt in petroleum products’ sales in naira by the Dangote refinery on Wednesday, immediately raised the cost of loading fuel at private depots in Lagos to N900/litre, compared to the N850/litre it sold for before the announcement.
The Dangote Group, in a statement issued to update the public on the naira-for-crude sale imbroglio indicated that the suspension of petroleum products’ sale in naira is temporary.
The Group stated: “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”, it added.
Clarifying online reports that Dangote Refinery is stopping loading due to an incident of ticketing fraud, the group described the reports as malicious falsehood.
It maintained: “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.”
Industry analysts and oil marketers have warned that the suspension of crude-for-naira sale by Dangote Refinery could worsen the pressure on the foreign exchange (FX) market, as dealers would now have to buy the United States dollars in at high rates for petroleum products.
Analysts familiar with the factors that led to the collapse of the crude-for-naira sale’s parley between the NNPCL and Dangote Refinery’s managements attributed the collapse to the huge forward sales of crude by NNPCL based on its indebtedness to international creditors on the arrangement.
According to them, this forward sales crude to the creditors had made it difficult for the state-controlled oil company to prioritize crude sale to Dangote and other local refineries for domestic petrol needs.
