…Fuel Pricing Controversy Deepens
….Focus to U.S. Exports Raise Eyebrows
….Government Delays, Market Jitters
Ibukun Oseni
Concerns are growing over Nigeria’s fuel price volatility as Dangote Refinery maintains its stance on selling petroleum products in dollars while simultaneously exporting jet fuel to the United States. The ongoing dispute over the naira-for-crude policy with the Nigerian National Petroleum Company Limited (NNPCL) has heightened market uncertainties, with petroleum marketers accusing the refinery of pressuring the government into a more favorable crude supply deal.
Depot owners and petroleum marketers have criticized Dangote Refinery’s decision to halt the sale of fuel in naira, arguing that it amounts to economic blackmail. According to industry sources, the refinery’s move could lead to increased fuel prices, further straining consumers already grappling with inflation.
“When marketers imported fuel under the subsidy regime, they paid in dollars. Paying Dangote in dollars won’t change the market dynamics,” a top executive at the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) said.
Dangote Refinery had earlier justified its decision, stating that aligning sales with dollar transactions was necessary to prevent a mismatch between revenue and crude purchase obligations.
Government Delays, Market
The federal government’s technical sub-committee on Domestic Sales of Crude Oil and Refined Products was scheduled to meet to decide the fate of the naira-for-crude arrangement but failed to convene due to the Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) delay in submitting a report on crude availability. This delay has left stakeholders uncertain about future fuel pricing policies.
The uncertainty surrounding Dangote Refinery’s pricing template has already triggered speculation of an imminent retail fuel price hike, with petrol currently selling between N860 and N950 per litre across different regions
Amid the local fuel supply concerns, Dangote Refinery has made its first major jet fuel shipment to the United States, exporting approximately 1.7 million barrels this month. Analysts suggest that the refinery is capitalizing on a temporary supply gap caused by maintenance at the Phillips 66 Bayway refinery in New Jersey.
While this move demonstrates the refinery’s growing influence in global energy markets, industry experts believe the U.S. exports are unlikely to be sustained in the long term due to high American jet fuel inventories.
As marketers explore alternatives to Dangote’s products, the government faces mounting pressure to resolve the naira-for-crude deadlock. If no agreement is reached soon, Nigeria could witness further fuel price increases, adding to the economic burden on citizens. Meanwhile, the refinery’s growing international footprint signals a shift in priorities that could reshape the domestic fuel market
