Business
Naira-for-crude: Looming fuel price hike as Dangote, NNPCL talks falter
The Dangote Petroleum Refinery has for the meantime stopped the sales of petroleum products in naira as the naira-for-crude discussions between the $20bn Lekki-based plant and the Nigerian National Petroleum Company Limited appear to have hit the brick walls.
Following the public announcement of the stoppage in petroleum products’ sales in naira by the Dangote refinery on Wednesday, the cost of loading petrol at private depots in Lagos skyrocketed into N900/litre. It was less than N850/litre before the announcement.
Industry experts and oil marketers feared that the halt in naira sales by the Dangote refinery could deepen the pressure on the foreign exchange market, as dealers would now have to access the United States dollars in large amounts to buy petroleum products.
This came as multiple industry sources familiar with what prompted the failure in the naira-for-crude talk condemned the humongous forward sales of crude by NNPCL.
In a statement on Wednesday, the Dangote Group noted that the suspension of petroleum products’ sale in naira is temporary.
The statement reads , “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.”
The refinery also debunked online reports that it was stopping loading due to an incident of ticketing fraud.
“This is a malicious falsehood. 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,” the statement said.
