THE decision by the Dangote Petroleum Refinery to adopt a dollar-based pricing template for petrol has triggered fresh uncertainty in Nigeria’s downstream petroleum sector, with marketers warning that the move has disrupted fuel loading operations and heightened fears of a possible supply crisis across the country.
Petroleum marketers told this newspaper on Sunday that fuel loading activities had slowed significantly following the refinery’s decision, with many operators suspending large-scale purchases as they awaited clarity on the new pricing regime and the cost implications of newly imported petroleum products.
The development has intensified concerns over the stability of petrol prices, with industry players expressing fears that Dangote’s decision to sell fuel in dollars could expose domestic prices to fluctuations in the foreign exchange market and worsen the cost burden on consumers.
Although some marketers alleged that the Lekki-based refinery had stopped loading trucks altogether, officials of the Dangote Group dismissed the claims as false, insisting that operations at the facility were continuing uninterrupted.
Petroleum marketers, however, maintained that uncertainty over pricing had compelled them to adopt a cautious approach, fearing that buying products at current rates could leave them counting losses if prices dropped shortly afterward.
The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, said marketers were grappling with unpredictable market conditions.
“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 explained that the situation had been worsened by uncertainty surrounding fresh crude supplies and imported petroleum products.
“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.
According to him, marketers are reluctant to commit to large purchases because they cannot predict whether petrol prices will rise or fall after loading products.
“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,” Ukadike said.
He noted that while fuel distribution had not been completely halted, the volume of products being lifted had reduced considerably. He urged the Federal Government to intervene quickly and resolve the pricing dispute before it further destabilises the downstream market.
“The Federal Government has to look inward and resolve this issue once and for all. This template issue should be resolved immediately,” he added.
Reports from the South-West indicate that the uncertainty has already forced several filling stations to suspend fresh purchases, while some have temporarily shut down operations.
The Zonal Chairman of IPMAN, Western Zone, Oyewole Akanni, confirmed the development in an interview with the News Agency of Nigeria in Ibadan, saying the crisis followed the suspension of Premium Motor Spirit loading at the Dangote refinery about four days ago.
According to him, the development compelled marketers to turn to private depots, where prices have surged.
He disclosed that the cheapest ex-depot price in Lagos currently ranges between N1,200 and N1,220 per litre, excluding transportation costs, while some marketers paid between N1,210 and N1,220 per litre on Friday.
“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 said.
“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 disruptions, Akanni maintained that there was no fuel scarcity and cautioned against panic buying.
“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.
The IPMAN official also criticised the refinery for failing to give marketers prior notice or explain the reasons behind the suspension of PMS sales.
“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 said.
Akanni added that the Nigerian National Petroleum Company Limited was also affected because it 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 obtain 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,” he said.
However, a spokesman for the Dangote Group rejected claims that fuel loading had been suspended, describing the reports as “fake news” allegedly spread by some marketers.
“The refinery is loading. Anybody can go there to check. That’s fake news to say we are not loading,” the official, who declined to be named, stated.
The spokesman further argued that importers were finding it increasingly difficult to compete with the refinery because petrol prices in Lomé, Togo, had risen.
Meanwhile, negotiations between the Federal Government and the Dangote refinery over the refinery’s decision to adopt dollar-based pricing are yet to yield an agreement, raising concerns that the standoff could prolong uncertainty and trigger further increases in petrol prices.
A senior government official familiar with the discussions disclosed that the dispute extends beyond pricing and touches on crude supply arrangements and the continued issuance of import licences to oil marketers.
According to the official, the refinery has expressed dissatisfaction with the Federal Government’s decision to continue issuing import permits despite its refining capacity.
“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 said.
The source also revealed that the refinery is unhappy with the volume of crude supplied by the Nigerian National Petroleum Company Limited and the relatively small proportion sold in naira.
“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.”
The official explained that the refinery had insisted on implementing a dollar-pricing model if the government failed to increase the volume of crude supplied in naira.
“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.”
The source stressed that the government had continued to engage the refinery but warned that no single player could be allowed to dominate or dictate the direction of the country’s petroleum market.
“The government has been discussing this matter. He said he was going to do this two weeks ago. The government asked for patience, but engagement continues,” the official said.
He noted that the refinery’s location within a free trade zone gives it considerable flexibility in determining the currency in which it conducts business.
“Unfortunately, the facility is in a free trade zone, so the refinery is actually allowed to sell in any currency it wants to sell. There are also many taxes the refinery is excluded from,” he said.
However, the Federal Competition and Consumer Protection Commission maintained that the naira remains Nigeria’s only legal tender for domestic commercial transactions.
Responding to enquiries, 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 government official further warned that authorities could expand petrol imports if negotiations with the refinery fail.
“If there is no agreement and he does not want to listen, the next step will be to allow more imports to come in. It is not possible to hold anybody to ransom,” he said.
Drawing comparisons with the cement industry, he argued that restricting imports had not necessarily translated into lower prices.
“Cement remains a good case study. The government banned cement importation. Has the cement price gone down? No. He already controls the market. He’s not going to bring it down.”
The dispute has become even more complicated following a legal challenge by Matrix Energy Group, AA Rano Nigeria and AYM Shafa Holdings over the continued issuance of licences for petroleum imports.
The marketers insist they have invested billions of dollars in storage, logistics and distribution infrastructure and should continue to participate in the market.
According to the government official, the lawsuit means the authorities cannot simply halt imports, especially if domestic supply becomes inadequate.
“Already, some people have gone to court to stop the government from banning petrol imports. So, in case the government wants to bend to Dangote’s will, some marketers have gone to court to get a court order preventing that,” he said.
The source also explained that the government could not sell all crude to domestic refiners in naira because crude exports remain Nigeria’s primary source of foreign exchange earnings.
“What’s our main source of foreign exchange? It’s still crude. And where is it coming from? Royalty and crude sales. So if they then sell everything in naira, where is the dollar going to come from to do other things?” he asked.
He disclosed that the refinery had previously received between 35 and 40 per cent of its crude allocation in naira but that the government must strike a balance between supporting local refining and preserving foreign exchange inflows.
“At the end of the day, what the government was trying to avoid is still the same thing that has happened. He had been threatening before it was done, but engagement continues,” the official added.