Dangote: Nigerians May Buy Petrol In U.S Dollars – Marketers Warn

Petroleum products retailers and marketers have warned that Nigerians could soon begin buying Premium Motor Spirit (PMS), popularly known as petrol, diesel and other refined petroleum products in United States dollars if the Federal Government fails to restore the naira-for-crude arrangement with Dangote Refinery.

The National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, gave the warning at the weekend.

Naija News reports that the warning comes days after Dangote Refinery resumed the sale of refined petroleum products in US dollars.

The decision effectively suspended the naira-for-crude arrangement, under which marketers and other off-takers bought refined petroleum products from the 700,000-barrels-per-day refinery using the naira.

The policy had been introduced to reduce pressure on foreign exchange demand and help stabilise fuel prices in the country.

Although the Federal Government has yet to officially comment on Dangote Refinery’s decision, there are reports that discussions are ongoing to restore the naira-for-crude agreement.

Reacting to the development, Gillis-Harry urged the government to conclude the talks without delay to prevent ordinary Nigerians from bearing the burden of another increase in fuel costs.

According to him, government intervention would help shield Nigerians from the effects of rising global energy prices.

“Nigerians may start buying petrol in US dollars if the Federal Government does not intervene in the naira-for-crude deal with Dangote Refinery.

“We hope the downstream oil sector will not be dollarised to that extent,” he told Daily Post.

The PETROAN president warned that allowing transactions in the downstream petroleum sector to be fully driven by the US dollar could put additional pressure on consumers who are already struggling with the high cost of living.

Industry operators have argued that restoring the naira-for-crude arrangement would help reduce foreign exchange pressure and improve price stability in the domestic fuel market.

The warning comes after depot owners and petroleum marketers recently increased the ex-depot and retail prices of petrol and diesel.

At present, petrol sells for between ₦1,155 and ₦1,220 per litre, while diesel sells for between ₦1,700 and ₦1,800 per litre in Abuja and surrounding areas.

Stakeholders are now awaiting the outcome of the reported talks between the Federal Government and Dangote Refinery over the future of the naira-for-crude arrangement.