Petroleum product marketers have revealed that fuel loading operations have been suspended at the Dangote Petroleum Refinery following a controversial decision by the management of the facility to sell fuel in US dollars. Numerous dealers disclosed on Sunday that the plant was not loading its transport trucks, raising widespread anxieties regarding a potential fuel scarcity across the country. However, the management of the oil refinery has refuted these claims, maintaining that fuel loading remains active at the Lekki-based complex. Oil marketers explained that they halted large-scale liftings over the past few days as they await comprehensive clarification regarding the new pricing structure adopted by the refinery, as well as the landing costs of newly imported petroleum shipments. This situation has triggered widespread uncertainty within the downstream sector, with dealers highly reluctant to buy immense volumes of Premium Motor Spirit at current costs only for the product price to crash unexpectedly shortly afterward.
The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, explained during a telephone interview on Sunday that dealers have been compelled to adopt a highly conservative approach due to the instability surrounding future fuel pricing templates. He pointed out that independent dealers are trying to study current market movements. Ukadike stated, “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,”.
He further observed that the operational confusion has been compounded by the impending arrival of fresh crude oil allocations and imported fuel shipments, whose actual price structures remain unverified. Ukadike stated, “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 added that oil dealers are afraid to commit to huge liftings because they cannot anticipate whether the pump price will drop or rise post-purchase. Ukadike stated, “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,”. According to the IPMAN spokesperson, the underlying friction has reduced the total volume of fuel loaded rather than completely halting distribution networks. He called upon the Federal Government to step in and normalize the pricing crisis, stating, “The Federal Government has to look inward and resolve this issue once and for all. This template issue should be resolved immediately,”.
Similarly, petroleum dealers across the South-West region confirmed that price fluctuations have discouraged fresh procurements, leading to the temporary closure of several retail outlets. The Zonal Chairman of IPMAN, Western Zone, Oyewole Akanni, shared this viewpoint during an interview with the News Agency of Nigeria in Ibadan on Sunday. He explained that the problem started when Premium Motor Spirit loading was put on hold at the Lekki plant around 4 days ago, forcing marketers to buy from private storage facilities at higher rates. Akanni specified that the cheapest ex-depot rate at private Lagos facilities sits between N1,200 and N1,220 per litre, excluding transport logistics, while Friday purchases hovered between N1,210 and N1,220 per litre. Explaining the shutdown of outlets, Akanni stated, “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. 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,”.
The zonal head clarified that there is currently no actual fuel shortage in the country, advising members of the public against panic purchases. Akanni stated, “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 noted that the refinery gave no official warning or reason for halting sales, adding that 4 trucks booked for his own filling stations have been stranded at the plant. Akanni stated, “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 noted that the Nigerian National Petroleum Company Limited is also impacted since it relies on the refinery for supply, adding that private depots now demand as high as N1,250 per litre while firms like NIPCO and Aiteo sell around N1,200 per litre. He stated, “The major issue now is the fluctuation in depot prices, which has created uncertainty in the market,”.
In response, an official spokesperson for the Dangote Group described the widespread assertions as fake news, blaming certain market players for propagating disinformation. The official, who requested anonymity due to the delicate nature of the matter, insisted that loading continues at the site. The official stated, “The refinery is loading. Anybody can go there to check. That’s fake news to say we are not loading,”. He remarked that importers are finding it difficult to stay competitive because fuel prices in Lome, Togo, have surged, making it impossible to challenge the pricing offered by Dangote.
Reports indicate that the Federal Government and the Dangote refinery have reached a deadlock regarding the issues that prompted the refinery to roll out a dollar-denominated pricing framework. This lingering dispute could stretch out the volatility in the downstream sector and trigger an additional rise in pump prices. A senior government official involved in the ongoing mediation revealed on Sunday that the standoff stems from the refinery's complaints about the continued issuance of import permits to marketers and friction over crude oil procurement guidelines. Speaking on the condition of anonymity, the official stated that the disagreement encompasses crude supply volumes and the exact ratio of feedstock sold in local currency. He mentioned that the management of the refinery is aggrieved that the government still allows product importation despite the domestic capacity of the Lekki plant. The official stated, “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. Then number two is that the refinery is saying that it is not getting enough crude oil even from the Nigerian National Petroleum Company Limited. The percentage of naira for crude that they are giving to the facility is not a lot. 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. So 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. So those are the two issues.”.
This development has sparked fresh anxieties about fuel price stabilization, as a dollar-based template directly subjects local fuel pricing to the volatility of the foreign exchange market. The government source explained that state authorities are actively negotiating with the refinery management to prevent further escalation. However, he emphasized that the government cannot allow a single operator to dominate the country by demanding import bans while discussions remain unresolved. The official stated, “The government has been discussing this matter. He said he was going to do this (dollar sale of fuel). He said this two weeks ago. And the government was asking for patience. Let us keep engaging now. So now that the new dollar pricing template has been done, the government will still keep engaging,”. He also noted that the refinery operates within a free trade zone, which grants it substantial commercial autonomy over currency selection. The official stated, “Unfortunately, the facility is in a free trade zone, so the refinery is actually allowed to sell in any currency it wants to sell. The refinery is in a free trade zone. And there are so many taxes not paid,”. He added, “Yes, the refinery still pays, but there are a lot of taxes the refinery is excluded from, because it is in a free trade zone. Those are the benefits you get when you are in a free trade zone.”.
Meanwhile, the Federal Competition and Consumer Protection Commission has rejected the dollar pricing proposal, asserting that the naira remains the only legal tender for local commercial operations. The Director of Corporate Affairs for the commission, Ondaje Ijagwu, made this clear on Sunday. Ijagwu stated, “The commission’s position is clear. The Nigerian naira is the legal tender in Nigeria and remains the lawful currency for domestic commercial transactions.”. Commenting on what the government would do if negotiations break down completely, the top official warned that fuel importation would be expanded to prevent a monopoly. The official stated, “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 Cement remains a good case study. The government banned cement importation. Has the cement price gone down? No. This is clear. So, why will he bring it down? He already controls the market. He’s not going to bring it down. So, that’s it.”. He pointed out that Nigeria has successfully relied on fuel imports for decades to secure supply, stating, “This country has been importing petrol for over 35 years. The world did not stop,”.
This warning unfolds amidst a lawsuit filed by 3 major petroleum marketers, Matrix Energy Group, AA Rano Nigeria, and AYM Shafa Holdings, challenging any moves to halt product import permits. The firms are asking the Federal High Court in Abuja to compel the Nigerian Midstream and Downstream Petroleum Regulatory Authority to continue issuing and renewing operational import licences. The marketers argued that they have committed billions of dollars into storage facilities and distribution logistics, sustaining national fuel supply for decades. The government source revealed that this litigation restricts the state from outrightly blocking imports, stating, “Already, some people have gone to court to try to stop the government from banning the importation of petrol. I hope you are aware. So, in case the government wants to bend to Dangote’s will, some marketers have gone to court to get a court order banning the government from stopping imports,”. He also clarified that the state cannot channel its entire crude output to local refineries in naira due to foreign exchange needs. The official stated, “So this is the issue. What’s our main source of foreign exchange? It’s still crude. And where is it coming from? Royalty and crude sales. So NNPC is the one that is bringing in these things. So if they then sell everything in naira, where is the dollar going to come from to do other things?”. He stated that the refinery previously received 35 per cent to 40 per cent of its crude in naira, stating, “The last time it was checked, the refinery was getting at least 35 per cent to 40 per cent of its crude in naira of what was being sold to him. Because where will the country then get the dollar from if everything is sold in dollars?”. He concluded that federal efforts have not entirely defused the crisis, stating, “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,”.
In addition, the consumer protection agency voiced concerns that recent drops in global crude oil prices have not yielded proportionate decreases in retail fuel pump prices for citizens. Ijagwu stated, “The commission stands by this position and expects that, within a reasonable period, the benefits of lower international crude oil prices will be reflected in corresponding reductions in pump prices where market conditions justify such adjustments. The FCCPC will continue to monitor developments closely and will not hesitate to take appropriate enforcement action where there is credible evidence of anti-competitive conduct, consumer exploitation or any other contravention of the Federal Competition and Consumer Protection Act.”. He noted that these structural worries prompted the state to call an extensive stakeholder assembly involving all sector operators to look into the matter.
0 Comments