Naira for Crude Deal: FG Schedules Meeting As New Petrol Prices Emerge at Depots
- The federal government of Nigeria has formed a panel to find a solution to the naira crude agreement impasse
- The panel followed the decision by the Dangote refinery to stop the sale of petroleum products in naira
- This decision by Dangote then led to the increase of petrol prices at private depots across the country
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends
The technical sub-committee on the naira-for-crude policy set up by the Federal Ministry of Finance and the Federal Ministry of Petroleum Resources has scheduled a meeting on Monday, March 22 to explore viable solutions to the challenges of supplying products to the Dangote refinery.
The committee has mandated the Nigerian Upstream Petroleum Regulatory Commission (NMPDRA) to come up with options that the panel would review as it struggles to revive the naira-for-crude deal.
Source: UGC
Punch reports that the struggle to supply crude oil to Dangote is due to NNPC's allocation of large volumes of crude to its foreign creditors to settle the loans acquired by the firm.
This makes it difficult to sustain the naira-for-crude deal between NNPCL and the Dangote refinery.
In response to the disruption, Dangote Refinery announced a temporary suspension of petroleum sales in naira.
In a statement released on X, Dangote Group said the 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.
Part of the statement reads:
"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 malicious falsehood. Our systems are robust and we have had no fraud issues."
Despite, Dangote decision, there is hope a solution can be found and the naira for the crude oil deal will not be completely halted.
Source: Getty Images
New petrol prices
The Dangote refinery's decision to withdraw crude oil sales in naira has created responses across the petroleum sector, with marketers now considering alternative sourcing options and preparing for potential market volatility.
Already, Data showed petrol price movements at loading depots on Thursday showed that Parker depot increased its loading price to N875 per litre from N852 per litre sold earlier in the day, BusinessDay reports.
Matrix Warri effected an increase of N22 from N852 to N875 per litre, and Zamson Depot increased its price from N853 to N875 per litre. Rainoil depot made the same price change from N853 to N875 per litre while Pinnacle Warri and Sobaz changed their prices to N875 per litre from N854 and N870, respectively.
Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), however, said that the marketers are ready to mitigate unforeseen disruptions.
Speaking also Hammed Fashola of the Independent Petroleum Marketers Association of Nigeria (IPMAN), has urged the federal government to uphold the naira-for-crude arrangement to stabilize petroleum prices.
Depots adjust petrol prices
Earlier, Legit.ng reported that oil marketers are buying petroleum products at new prices, which could lead to changes in fuel prices at filling stations
The hike in depot prices is attributed to the petroleum market changes following Dangote's decision to stop the sale of petrol in the naira.
In recent weeks, petrol prices at filling stations have been below N1,000 and there are .. worriesorries it could change soon.
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Source: Legit.ng
