By Springnewsng Media Limited | March 25, 2025

The decision by the Federal Government to halt the naira-for-crude arrangementhttp://Federal Government to halt the naira-for-crude arrangement has left independent marketers speculating, leading to a surge in demand at private depots. This has resulted in an immediate rise in the cost of loading PMS, which jumped from less than N850/litre to about N900/litre at private depots in Lagos.

The suspension of the sale of crude oil to the Dangote Petroleum Refinery http://sale of crude oil to the Dangote Petroleum Refineryin naira has triggered concerns of a potential hike in petrol prices, with some filling stations stockpiling Premium Motor Spirit (PMS) in anticipation of an increase.

Depot Owners Profit, IPMAN Warns Against Panic Buying

Reacting to the development, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, warned marketers against panic buying, cautioning that the Dangote refinery may later crash prices.

“Depot owners are taking advantage of the situation to increase prices, but we are advising marketers to avoid buying in excess because when Dangote resumes selling in naira, prices may drop, causing losses for those who hoarded fuel,” Ukadike said.

He also revealed that discussions between the Federal Government and the Dangote refinery were ongoing to resolve the misunderstanding and restore the naira-for-crude deal.

Government and Industry Players Seek Resolution

Sources from the Federal Ministries of Finance and Petroleum Resources confirmed that a Technical Sub-Committee on the Naira-for-Crude Policy would reconvene to find a solution. Meanwhile, officials from the Nigerian National Petroleum Company Limited (NNPCL) admitted challenges in crude supply, citing the company’s forward sale of large crude volumes to secure international loans.

The NNPCL has supplied 48 million barrels of crude to the Dangote refinery since October 2024 under the naira-for-crude arrangement, but negotiations for renewal are still ongoing.

Market Reactions and Economic Implications

Industry experts warn that the suspension could increase pressure on the foreign exchange market, forcing dealers to source dollars to buy petrol. The National Vice President of IPMAN, Hammed Fashola, noted that the naira’s recent stability might be threatened due to increased demand for foreign exchange.

Despite fears of a price hike, stakeholders remain hopeful that the government and Dangote refinery will reach an agreement soon, bringing relief to marketers and consumers alike.