Petrol Marketers May Sell in Dollars if Naira-for-Crude Deal Fails.
~ IPMAN.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has expressed concerns regarding the potential shift to dollar transactions for petrol sales if the naira-for-crude oil swap deal fails. This arrangement, introduced on October 1, 2024, allowed local refiners, including the Dangote Refinery, to purchase crude oil in naira instead of dollars, aiming to stabilize fuel prices and support the local currency. www.multilinks.biz
However, recent developments indicate challenges in sustaining this agreement. The Nigerian National Petroleum Company Limited (NNPCL) has reportedly suspended the naira-for-crude oil swap deal, compelling domestic refiners to procure crude oil in dollars. This shift could lead to increased petrol prices, potentially reaching up to N1,200 per litre, as refiners adjust to the new procurement terms. www.multilinks.biz
Aliko Dangote, President of Dangote Industries Limited, had previously lauded the naira-for-crude swap deal for its positive impact on Nigeria’s economy, which contributed to a reduction in petroleum product prices nationwide. In an effort to alleviate the financial burden on Nigerians, Dangote announced a price reduction for Premium Motor Spirit (PMS) from N970 to N899.50 at the Dangote Refinery loading gantry, while also offering favorable credit terms to marketers. To ensure that this price reduction reached end consumers, a partnership was established with MRS to sell petrol from its retail outlets nationwide at N935 per litre. www.multilinks.biz
The suspension of the naira-for-crude deal raises concerns about the potential impact on petrol pricing and the broader economy. IPMAN has warned that if marketers are required to purchase crude oil in dollars, the additional foreign exchange burden could be transferred to consumers, leading to higher petrol prices. This development underscores the need for stakeholders to reassess the current arrangement to prevent further strain on the economy and ensure the stability of fuel prices for Nigerians.
Recent Developments in Nigeria’s Fuel Pricing and Refinery Operations.
Nigeria’s Dangote refinery says it will suspend fuel sales in local currency.
www.multilinks.biz
By
