Petroleum marketers have slowed down the purchase of Premium Motor Spirit (PMS) following the Dangote Petroleum Refinery's decision to begin selling fuel in dollars, a move that has created uncertainty over pricing in the downstream sector.
Although some marketers claimed that fuel loading at the Lekki-based refinery had been suspended, raising concerns over possible supply disruptions, the refinery denied the allegation, insisting that loading operations were continuing as normal. However, marketers said they had reduced large-scale purchases while awaiting clarity on the refinery's new pricing structure and the cost of imported petroleum products expected into the market.
The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, said the hesitation among marketers was driven by uncertainty over future fuel prices. "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," Ukadike said.
He explained that the arrival of new crude supplies and imported petrol had further complicated the market, as marketers were unsure of the pricing template that would be adopted. "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 stated.
Ukadike noted that marketers were reluctant to commit to fresh purchases because they could not predict whether pump prices would rise or fall after buying products. "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," he said. He added that while fuel distribution had not stopped completely, the volume of products being lifted had dropped significantly. He urged the Federal Government to intervene, saying, "The Federal Government has to look inward and resolve this issue once and for all. This template issue should be resolved immediately."
Similar concerns were echoed in the South-West, where the Western Zone Chairman of IPMAN, Oyewole Akanni, said uncertainty over petrol prices had forced many marketers to suspend fresh purchases, leading to the temporary closure of some filling stations. According to him, the disruption followed the reported suspension of PMS loading at the Dangote refinery about four days ago, forcing marketers to buy from private depots where ex-depot prices now range between N1,200 and N1,220 per litre, excluding transportation costs.
Akanni said, "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."
Despite the situation, Akanni dismissed fears of an imminent fuel shortage, urging motorists not to engage in panic buying. "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 said. He also disclosed that the refinery had neither informed marketers nor explained the reason for the reported suspension, adding, "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."
According to Akanni, the development has also affected the Nigerian National Petroleum Company Limited, which sources petrol from the Dangote Refinery. He added that while some private depots are now selling PMS for as much as N1,250 per litre, marketers can still obtain products from NIPCO and Aiteo at around N1,200 per litre as they await greater clarity on market pricing.
Dangote Officials Deny Claim
A spokesperson for the Dangote Group has denied claims that the Dangote Petroleum Refinery halted the loading of petroleum products, describing the reports as unfounded and misleading.
Reacting to the allegations, the company accused some petroleum marketers of circulating false information about the refinery's operations. The spokesperson maintained that fuel loading was continuing as normal at the Lekki-based facility.
“The refinery is loading. Anybody can go there to check. That’s fake news to say we are not loading,” the official told one of our correspondents, while requesting anonymity because of the sensitive nature of the issue.
The spokesperson further argued that some fuel importers were struggling to remain competitive as market dynamics had shifted. According to the official, rising petrol prices in Lomé, Togo, have made it increasingly difficult for importers to compete with the pricing offered by the Dangote refinery.
FCCPC Reject Dollar
The Federal Competition and Consumer Protection Commission (FCCPC) has reaffirmed that the naira remains Nigeria's only legal tender for domestic commercial transactions following reports that the Dangote Petroleum Refinery is considering pricing petroleum products in US dollars.
Responding to enquiries on Sunday, the FCCPC's Director of Corporate Affairs, Ondaje Ijagwu, insisted the commission's position was unchanged. “The commission’s position is clear. The Nigerian naira is the legal tender in Nigeria and remains the lawful currency for domestic commercial transactions,” he said.
A senior government official also warned that the Federal Government would not allow any company to dominate the downstream petroleum market if negotiations with the refinery fail. “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,” the official said.
Using the cement industry as an example, the source argued that banning imports does not necessarily lower prices. “Cement remains a good case study. The government banned cement importation. Has the cement price gone down? No... He already controls the market. He’s not going to bring it down,” the official added, noting that Nigeria had imported petrol for decades and could continue to do so if necessary.
The comments come as Matrix Energy Group, AA Rano Nigeria and AYM Shafa Holdings seek a Federal High Court order compelling the Nigerian Midstream and Downstream Petroleum Regulatory Authority to continue issuing and renewing petroleum import licences. According to the government official, the lawsuit complicates efforts to prioritise domestic refining. “Some marketers have gone to court to get a court order banning the government from stopping imports,” the source said.
The official also said the government must balance crude sales to domestic refiners with the country's foreign exchange needs. “What’s our main source of foreign exchange? It’s still crude... So if they then sell everything in naira, where is the dollar going to come from to do other things?” the official asked, adding that the Dangote refinery had previously received 35 to 40 per cent of its crude supply in naira and that discussions with the company were continuing.
Meanwhile, the FCCPC expressed concern that falling international crude oil prices have not resulted in corresponding reductions in petrol prices. Ijagwu said, “The FCCPC remains concerned that recent declines in international crude oil prices have not been reflected proportionately in retail petrol prices... the subsequent decline in international crude oil prices has not translated into corresponding reductions for consumers.” He added that the concerns prompted the Federal Government to convene a stakeholders' meeting involving regulators, refiners, marketers and other industry players.