The Dangote Refinery has not yet started selling petroleum products in US dollars, despite its previous announcement, the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) confirmed on Wednesday. This statement provides clarity amid ongoing discussions about currency policies in Nigeria’s petroleum sector and their implications for fuel prices and market stability.
PETROAN Confirms Naira Transactions Continue
PETROAN President Billy Gillis-Harry, speaking on Arise Television, affirmed that the refinery’s transactions remain in Naira, Nigeria’s local currency. “So as far as I know, up until yesterday, our members who bought products are still buying in Nigeria and Naira,” he said.
He noted that no formal communication has been received regarding a shift to dollar-based sales, nor have fuel prices at depots increased as of Wednesday. This reassurance counters speculation that the refinery’s operations might disrupt the market, emphasizing stability for now.
Dangote Refinery Suspension of Sales of Petroleum Products in Naira
On March 19, the Dangote Refinery, owned by Africa’s richest man, Aliko Dangote, announced a temporary suspension of Naira-based sales. “If we continue to sell in Naira, we will experience a mismatch in sales proceeds and crude oil purchases,” the refinery stated.
The Lagos-based Refinery highlighted that buying crude oil in dollars while selling products in Naira creates a currency mismatch. Despite several meetings to resolve this issue, no agreement has been finalized, leaving the threat of dollar sales looming but unimplemented.
PETROAN Pushes for Naira-Based Crude Oil Sales
PETROAN remains a staunch advocate for selling Nigerian crude oil in Naira, a policy it believes bolsters the local economy. Gillis-Harry stressed the need for stakeholder input if this policy is to change. “We believe that this decision should be presented to the stakeholders so we can all make input as to the pros and cons of any of these policies,” he stated.
He pointed to the Petroleum Industry Stakeholder Forum, led by the Minister of Petroleum (Oil), as the appropriate platform for such discussions, ensuring transparency and broad consultation.
Fuel Price Fluctuations Driven by Multiple Factors
Fuel prices in Nigeria remain volatile, influenced by production costs, delivery expenses, and landing costs, according to PETROAN. “The price of petroleum products, especially PMS, is dependent on different parameters, mostly the cost for production, cost for delivery, and the total cost of landing,” Gillis-Harry explained.
He added that prices will rise or fall based on these variables: “If the cost goes down, then we’ll have lower prices. If the cost goes up, then we’ll have higher prices.” This fluidity prevents fixed pricing predictions, a reality consumers must navigate.
No Need for Panic Buying, PETROAN Assures
Addressing public concerns, Gillis-Harry urged Nigerians to refrain from panic buying, asserting that fuel supplies are sufficient. “We have petroleum products to our knowledge. Most of our retail outlets are wet,” he said, indicating that stocks are not at risk of depletion soon.
He emphasized that current conditions do not signal an impending scarcity, warning that panic buying could unnecessarily spike demand and prices. PETROAN’s confidence offers a calming perspective amid economic uncertainties.
Retail Outlets Suffer from Price Instability
The persistent fluctuation in fuel prices is taking a toll on PETROAN members, eroding their financial stability. “It’s depleting our income, it’s depleting our purchasing power and the capital to invest,” Gillis-Harry argued.
This instability may prompt increased imports if external prices become more competitive, a shift that could further challenge local retailers. The association underscores the broader economic impact on its members, highlighting a critical issue for Nigeria’s petroleum retail sector.
The Dangote Refinery has not transitioned to dollar sales yet, with PETROAN members still transacting in Naira. The association champions Naira-based crude oil sales and calls for stakeholder engagement on policy shifts.
Amid fluctuating fuel prices, PETROAN reassures the public of adequate supplies, advising against panic buying while acknowledging the strain on retail outlets. As Nigeria’s petroleum market evolves, these dynamics will continue to shape its economic landscape.
