Marketers Change Petrol Prices, Threaten to Sell Fuel in Dollars Over Dangote’s Announcement

• Petroleum marketers have adjusted their pump prices in anticipation of an increase from the Dangote Refinery
• The move came after the naira-for-crude sale agreement between Dangote Refinery and NNPC collapsed last week
• The Independent Petroleum Marketers Association of Nigeria (IPMAN) said it would retaliate by selling in dollars if Dangote sells in foreign currency

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

Petroleum oil marketers have adjusted their pump prices amid ongoing disagreement between the Nigerian National Petroleum Company Limited (NNPC) and the Dangote Refinery over the sale of crude in naira.

Legit.ng reported that the price adjustments came as private depot owners increased their prices from N850 per litre to N878.

Marketers give reasons for wanting to sell in dollars

Meanwhile, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has threatened to begin the sale of petrol in dollars if the Dangote Refinery starts selling its products in foreign currency.

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According to IPMAN, the move was in response to worries that denominating transactions in dollars could pressure the naira, causing inflation and affecting energy security.

A previous report by Legit.ng disclosed that the mega Dangote Refinery halted the sale of petroleum products in naira following the collapse of the naira-for-crude sale deal with NNPC.

The refinery noted that the decision became necessary to avoid an FX mismatch between its sales and crude oil purchase obligations.

The development has led energy policy experts to ask Nigerians to brace up for higher petroleum product prices.

The plant disclosed that its sales of petroleum products in naira have surpassed the value of naira-denominated crude it has received, saying it is adjusting its sales currency in line with its crude currency procurement.

Petrol sales in dollars will crash the naira

However, IPMAN’s national publicity secretary, Chinedu Ukadike, said selling fuel in dollars would be necessary to avoid financial strain on marketers if the plant adopts dollar transactions.

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He said the Dangote announcement is not suitable for independent marketers as it would put pressure on the local currency.

The IPMAN scribe appealed to the Nigerian government to continue to supply Dangote products in naira so it does not increase the demand for dollars and pressure the naira.

He said the development will increase dollar sales as demand will outstrip supply, which might lead to inflation and energy insecurity.

Petrol stations raise prices

Investigations by Legit.ng show that Dangote Refinery partners have increased their petrol prices across Nigeria.

MRS Oil increased its petrol prices from N850 to N860, and Ardova Petroleum and others also raised their petrol prices by the same margin.

The stations cited the recent announcement by the refinery to sell petrol in foreign currency as the reason,

Leadership reports that Ukadike asked the Nigerian government to allow Dangote to continue to access crude supplies in naira to avoid economic challenges.

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Experts predict new petrol price

Legit.ng earlier reported that following the suspension of the naira-for-crude arrangement between the Nigerian National Petroleum Company Limited (NNPC), the Dangote Refinery and domestic refiners, Nigerians have been asked to brace up for higher PMS prices.

The development comes as the parties could not renew the naira-for-crude deal entered into in October last year.

The deal ensured that domestic refineries, including the mega Dangote Refinery, get crude oil in the local currency to ensure availability, better pricing and reduced prices.

Proofreading by Nkem Ikeke, copy editor at Legit.ng.

Source: Legit.ng