Petroleum marketers have suspended large-scale fuel loading from the Dangote Petroleum Refinery following the company’s decision to adopt a dollar-based pricing model for petrol, a move that has created uncertainty across Nigeria’s downstream oil sector.
Several marketers on Sunday said that fuel loading had slowed significantly as they awaited clarification on the refinery’s new pricing template and the expected prices of newly imported petroleum products.
The situation has sparked concerns over a possible tightening of fuel supply nationwide, although the Dangote refinery has denied reports that loading activities have stopped.
According to marketers, the uncertainty has made them reluctant to purchase large volumes of petrol at current prices for fear that market prices could decline shortly after.
The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, explained that marketers were adopting a cautious approach because they could not predict the direction of petrol prices.
“The issue is simple; marketers are not buying because they are trying to look at the market dynamics. Whatever we are using today is existing products in tank farms, which we are buying around N1,250 and N1,300,” Ukadike said.
He noted that uncertainty over the pricing of new crude supplies and imported petrol had further complicated purchasing decisions.
“The problem we are now facing is that this new crude oil that they are bringing- what will be the template? Also, those who have brought in petroleum products and are given licences are also estimated to place their price at N1,350, which marketers are also wary of,” he stated.
Ukadike said marketers were unwilling to stockpile products without knowing whether prices would increase or fall.
“So everyone is just sceptical about loading products because when you load, you don’t know the next price, if it is going to reduce or go higher. You are still expected by consumers to sell at the prevailing price,” he added.
Although petrol distribution has not stopped entirely, he said the volume of products being purchased has dropped considerably.
Ukadike called on the Federal Government to urgently address the uncertainty surrounding fuel pricing.
“The Federal Government has to look inward and resolve this issue once and for all. This template issue should be resolved immediately,” he said.
South-West Marketers Report Reduced Purchases
The uncertainty has also affected marketers in the South-West, with many confirming that they had halted fresh purchases while waiting for a clearer direction on petrol pricing.
The IPMAN Western Zone Chairman, Oyewole Akanni, said the disruption followed the reported suspension of petrol loading at the Dangote refinery about four days ago.
According to him, marketers have been forced to source products from private depots at much higher prices.
He explained that the lowest ex-depot price currently ranges between N1,200 and N1,220 per litre, excluding transportation costs.
“The non-availability of fuel at some filling stations and the closure of others are due to fluctuations in the price of lifting fuel from depots.”
Akanni added:
“Since the Dangote refinery stopped selling PMS about four days ago, private depot owners have increased their prices. Many filling stations that have exhausted their stock are waiting to see whether prices will come down when the Dangote refinery resumes sales or increase further. Only a few marketers are buying products for now because of the uncertainty.”
Despite the challenges, he insisted that Nigeria was not facing a fuel shortage.
“There is no fuel scarcity. Members of the public should not panic. Although there is a possibility of an increase in the pump price if the current situation persists,” he said.
Akanni also claimed that the refinery did not provide prior notice before suspending petrol sales to marketers.
“I was supposed to have received four truckloads of PMS four days ago, but that has not happened because the trucks are at the Dangote refinery, which has not been selling. The company is not even loading its own trucks. They are all parked there,” he alleged.
He added that the Nigerian National Petroleum Company Limited (NNPC) was equally affected because it also sources products from the Dangote refinery.
According to him, private depots are now selling petrol for as much as N1,250 per litre, while marketers can still purchase products from NIPCO and Aiteo at about N1,200 per litre.
“The major issue now is the fluctuation in depot prices, which has created uncertainty in the market,” Akanni said.
Dangote Refinery Denies Suspending Loading
Reacting to the reports, a spokesperson for the Dangote Group dismissed claims that the refinery had halted fuel loading.
The official described the reports as “fake news”, insisting that operations remain normal.
“The refinery is loading. Anybody can go there to check. That’s fake news to say we are not loading,” the spokesperson said.
The official also argued that marketers importing petrol were struggling to compete because fuel prices in Lomé, Togo, had increased, making it more difficult to match Dangote refinery’s prices.
Federal Government Yet To Reach Agreement with Dangote
Meanwhile, a senior government official familiar with ongoing discussions disclosed that the Federal Government and the Dangote refinery have not resolved the issues that prompted the refinery to introduce a dollar-based pricing template.
According to the source, the disagreement extends beyond petrol pricing and involves crude oil supply arrangements and the continued issuance of import licences to other marketers.
The official said the refinery believes it is not receiving sufficient crude oil from the NNPC and is dissatisfied with the proportion of crude sold to it in naira.
“So the issue is that Dangote is unhappy about two things; one is that the government gave import permits. They issued import permits to some companies while his refinery is capable. So he was already angry on that level.”
The official continued:
“Then number two is that the refinery is saying that it is not getting enough crude oil even from the Nigerian National Petroleum Company Limited. The percentage of naira for crude that they are giving to the facility is not a lot.”
According to the source, the refinery has insisted that unless more crude is supplied in naira, it will continue selling refined products in dollars.
“Number one is that the facility is still not getting enough, according to him. And number two is that the portion they are selling to him in naira is still a little. So he still has to do most purchases in dollars. So the facility is saying that if the government cannot increase the crude they are giving to him in naira, the new dollar pricing template is what he will do. So those are the two issues.”
The official said discussions between both parties are continuing.
“The government has been discussing this matter. He said he was going to do this (dollar sale of fuel). He said this two weeks ago. And the government was asking for patience. Let us keep engaging now. So now that the new dollar pricing template has been done, the government will still keep engaging.”
The source also noted that the refinery’s location within a Free Trade Zone gives it flexibility over the currency used for commercial transactions.
“Unfortunately, the facility is in a free trade zone, so the refinery is actually allowed to sell in any currency it wants to sell.”
FCCPC Insists Naira Remains Legal Tender
The Federal Competition and Consumer Protection Commission (FCCPC) has maintained that the naira remains the only legal currency for domestic commercial transactions in Nigeria.
Responding to reports that the refinery may sell petroleum products in dollars, the commission’s Director of Corporate Affairs, Ondaje Ijagwu, said:
“The commission’s position is clear. The Nigerian naira is the legal tender in Nigeria and remains the lawful currency for domestic commercial transactions.”
The FCCPC also expressed concern that the recent decline in international crude oil prices has not been reflected in retail petrol prices.
“The FCCPC remains concerned that recent declines in international crude oil prices have not been reflected proportionately in retail petrol prices. As the commission stated in its 28 June public statement, pump prices increased rapidly when crude oil prices rose, yet the subsequent decline in international crude oil prices has not translated into corresponding reductions for consumers.”
Ijagwu said the commission expects lower global crude prices to eventually translate into lower pump prices where market conditions permit.
“The FCCPC will continue to monitor developments closely and will not hesitate to take appropriate enforcement action where there is credible evidence of anti-competitive conduct, consumer exploitation or any other contravention of the Federal Competition and Consumer Protection Act.”
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