Motorists Rush to Filling Station Over New Price Concerns After Dangote Stops Selling in Naira

• There has been panic buying at various filling stations across Nigeria by motorists
• This followed the announcement by Dangote to stop selling its Petroleum products in naira
• Experts and marketers expressed worries that the change would result in a new surge in PMS and other goods

Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

After Dangote Refinery announced on Wednesday that it was suspending the sale of petroleum products, there is concern regarding the price of fuel.

Investigation at a few filling stations yesterday shows that the development is driving panic buying at some of them, with marketers cautioning against it even if fuel prices are still stable.

On Wednesday, Dangote Refinery announced that it will no longer be selling its PMS, diesel, and jet fuel products in naira.

In a message to its customers, Dangote Refinery said,

“To date, our sales of petroleum products in Naira have exceeded the value of Naira-denominated crude we have received. As a result, we must temporarily adjust our sales currency to align with our crude procurement currency.”

Naira-for-crude collapse

Daily Trust reports that the development was due to the collapse of the naira-for-crude deal between it and the Nigerian National Petroleum Company Limited (NNPCL).

The agreement, which began in October 2024, was intended to last for six months, terminating at the end of March. However, execution encountered several difficulties due to a shortage of supplies.

Because the pricing would now be dollarized, marketers and experts voiced concerns that the move might lead to a new increase in PMS and other products.

In an interview with Daily Trust yesterday, Chinedu Ukadike, National Publicity of the Independent Petroleum Marketers’ Association of Nigeria (IPMAN), expressed hope that the federal government would settle its dispute with Dangote so that it could start selling its goods in naira again.

He cautioned that if marketers start purchasing petroleum in US dollars, they may be compelled to sell in US dollars as well, which would put a tremendous amount of pressure on the currency.

He disclosed that already some tank farms had started increasing their products to independent marketers when NNPC and Dangote had not increased their prices.

He said,

“We the independent marketers are patiently watching the scenario and also patiently watching Dangote and the FG in resolving this issue of Naira to crude which will definitely help us and stabilise the economy, some tank farm owners have started increasing prices of petroleum products in their tank farms but we the independent marketers are appealing to our marketers to not engage in panic buying because any moment from now this issue will be resolved and normal sales will be returned.

Only FG can intervene

Professor of Energy Law, Yemi Oke asked the federal government to immediately intervene to avert a price increase.

He said,

“The reality is that with the policy Dangote just brought out, it means PMS price would naturally go up unless the federal government intervenes and directs the continued sale of crude to Dangote in naira. That is the only way Dangote can hedge against price volatility with the exchange rate.

Experts predict new petrol price

Legit.ng reported that following the suspension of the naira-for-crude arrangement between the Nigerian National Petroleum Company Limited (NNPC), the Dangote Refinery and domestic refiners, Nigerians have been asked to brace up for higher PMS prices.

The development comes as the parties could not renew the naira-for-crude deal entered into in October last year.

The deal ensured that domestic refineries, including the mega Dangote Refinery, get crude oil in the local currency to ensure availability, better pricing and reduced prices.