- The Independent Petroleum Marketers of Nigeria said marketers may sell petrol to Nigerians in dollars
- This follows the decision of Dangote Refinery to temporarily halt the supply of petrol in naira due to the naira-for-crude impasse with the Nigeria National Petroleum Company Limited
- IPMAN said the development would further put pressure on the foreign exchange
The Independent Petroleum Marketers of Nigeria (IPMAN) has warned that petrol marketers may be forced to sell petroleum products to Nigerians in dollars following the suspension of the sale of petroleum products in naira by Dangote Refinery.
The National Publicity Secretary of IPMAN, Chinedu Ukadike, disclosed this in an interview with Nairametrics, and expressed concerns about the impact of Dangote Refinery’s decision on pump prices and foreign exchange.
Recall that Dangote Refinery announced a temporary halt in the sale of petroleum products in naira, citing an imbalance between its sales proceeds and crude oil purchase obligations, which are denominated in US dollars.
The announcement came days after the expiration of the naira-for-crude arrangement between the Federal Government and local refineries, including Dangote, in which crude oil is supplied to local refineries in the local currency.
IPMAN warns of imminent dollar retailing of petrol
IPMAN’s National Publicity Secretary stated that since many marketers buy from Dangote Refinery, they may have to start selling in dollars to Nigerians if the Federal Government and the Dangote Refinery as well as other local refineries do not reach an agreement on the naira-for-crude arrangement.
“I was taken aback [by the announcement by Dangote]; I thought that we had forgone that era whereby the issue of the naira had been settled between the Federal Government and Dangote.
“However, it had a specific period for which it would run so that they would be able to test run the validity.
“It is quite unfortunate that after the Federal Government has stabilised the naira-to-crude issue, we are still talking about it again.
“…As marketers, if we are going to be buying petroleum products in dollars, it means that we will also sell in dollars because we must pass the bulk to the final consumer. Whatever happens in the distribution chain goes to the pump,” Ukadike said.
Decision to further lead to FX pressure
Ukadike added that the development will further put pressure on the foreign exchange and lead to the depreciation of the naira.
He noted that with the decision, marketers will face a hard time sourcing for dollars to buy products from Dangote Refinery, sell in naira, and be forced to convert to dollars to get more supplies.
“Are we going to buy in dollars, sell in naira, and then convert again to dollars to go and buy? We are not conversion centres.
“So I believe it is very pertinent to address that issue. If not, it will further degrade our naira and put serious pressure on the foreign exchange. It’s not good for our economy,” Ukadike said.
He also expressed optimism that the naira-for-crude arrangement would be revisited and Dangote Refinery would rescind its decision.
Ukadike added that marketers may switch to buying from the Nigeria National Petroleum Company Limited (NNPCL) if it continues to sell petroleum products to marketers in naira.
“If NNPC would sell to us in naira, we will also buy in naira. But I am hopeful that it will be resolved soon,” he further stated.
IPMAN members to directly load petrol from Dangote refinery at N990/litre
Meanwhile, TheRadar earlier reported that the Independent Petroleum Marketers Association of Nigeria (IPMAN) announced a groundbreaking agreement with the Dangote Petroleum Refinery to directly lift petrol from the country’s largest refinery in Lekki, Lagos.
Over 30,000 IPMAN members are set to buy Premium Motor Spirit (PMS) in bulk, marking a major shift in Nigeria’s petroleum distribution network.
