Many filling stations have started hoarding Premium Motor Spirit (PMS), also referred to as petrol, since Dangote Petroleum Refinery suspended selling petroleum products in naira.
According to Punch News, the Federal Government’s decision to stop selling crude oil to the refinery in local currency has caused these retailers to predict a possible increase in fuel prices. As a result, they are stockpiling petrol to sell at greater prices in the future.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has warned that retailers may lose a lot of money if they engage in panic buying.
Citing difficulties in the naira-for-crude talks with the Nigerian National Petroleum Company Limited (NNPCL), Dangote Refinery stated last week that it would temporarily stop selling petroleum products in naira.
The refinery, which has a capacity of 650,000 barrels per day, clarified that there is a discrepancy between its sales revenue and its commitments to buy crude oil, which are valued in US dollars.
The refinery has not yet provided details on how petroleum marketers will buy PMS going ahead, five days after the announcement.
Market Reactions and Warnings
- Private depot owners have already increased prices in anticipation of a potential petrol price hike.
- Filling station operators have not yet raised their pump prices but are stockpiling products to sell at a higher rate later.
- IPMAN spokesperson Chinedu Ukadike has condemned private depot owners for profiteering from the impasse, warning that it is detrimental to the economy.
- He urged marketers to avoid panic buying, emphasizing that Dangote Refinery might eventually lower prices, which could lead to financial losses for those hoarding fuel.
The Federal Government and Dangote Refinery are currently in discussions to resolve the situation and potentially resume crude oil sales in naira. Industry stakeholders are eagerly awaiting further updates from both parties.
