FG Steps In as Dangote Fuel Row Escalates

• Uncertainty over dollar pricing stalls product lifting, marketers await new pricing template
• FCCPC insists naira remains Nigeria’s only legal tender for domestic transactions
• Dangote denies halting fuel loading as talks with Federal Government continue

The Federal Government has intensified efforts to resolve a brewing dispute with the Dangote Petroleum Refinery over its proposed dollar-denominated fuel pricing, as petroleum marketers across the country suspended fresh purchases of Premium Motor Spirit (PMS) amid growing uncertainty over pricing.

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The standoff has unsettled Nigeria’s downstream petroleum market, with independent marketers delaying large-volume purchases over fears that petrol prices could fluctuate sharply once a new pricing template takes effect.

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A senior government official involved in the negotiations disclosed that discussions with the refinery were ongoing but had yet to produce an agreement on issues surrounding crude oil supply, import licences and the refinery’s decision to adopt a dollar-based pricing model.

According to the official, the disagreement extends beyond the refinery’s pricing policy.

“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.

“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.

“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.”

The source, who requested anonymity because of the sensitivity of the negotiations, said government engagement with the refinery would continue but stressed that authorities would not permit any market participant to dictate national supply arrangements.

“The government has been discussing this matter… The government will still keep engaging.

“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 also explained that the refinery, being located within a Free Trade Zone, enjoys legal flexibility regarding the currency in which it conducts commercial transactions.

While negotiations continue, marketers said uncertainty over future petrol prices had forced them to suspend fresh loading.

The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, said operators were unwilling to commit huge funds to fuel purchases without knowing whether prices would rise or fall.

“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 said marketers were also uncertain about the pricing of new crude supplies and imported petroleum products.

“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.

“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.”

Ukadike urged the Federal Government to quickly settle the pricing dispute to restore confidence in the downstream sector.

Similarly, the IPMAN Western Zone Chairman, Oyewole Akanni, said the uncertainty had slowed fuel purchases, with many marketers waiting for clarity before restocking.

According to him, marketers have resorted to buying products from private depots at higher prices after what he described as the suspension of PMS sales by the Dangote refinery.

“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.

“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.”

Akanni, however, maintained that there was no fuel scarcity and advised motorists against panic buying.

The Dangote Petroleum Refinery rejected claims that it had stopped loading fuel, insisting operations were proceeding normally.

A spokesman for the Dangote Group dismissed reports of a shutdown as false.

“The refinery is loading. Anybody can go there to check. That’s fake news to say we are not loading.”

Meanwhile, the Federal Competition and Consumer Protection Commission (FCCPC) reaffirmed that the Nigerian naira remains the country’s only lawful currency for domestic commercial transactions.

Responding to enquiries on the refinery’s reported dollar pricing plan, the FCCPC Director of Corporate Affairs, Ondaje Ijagwu, said:

“The commission’s position is clear. The Nigerian naira is the legal tender in Nigeria and remains the lawful currency for domestic commercial transactions.”

Ijagwu also expressed concern that falling international crude oil prices had not translated into lower pump prices for Nigerian consumers.

“The FCCPC remains concerned that recent declines in international crude oil prices have not been reflected proportionately in retail petrol prices.”

He added that the commission would continue monitoring developments in the downstream petroleum sector and would take enforcement action where there was credible evidence of anti-competitive conduct or consumer exploitation.