Nigerians are bracing up for another hike in the price of petrol as the Dangote Refinery plans to stop loading petroleum products for Nigerian market.
This is against the background of faltering naira-for-crude deal agreements between the Dangote Refinery and the Nigerian National Petroleum Company Limited. Last October the Federal government approved the naira-for-crude deal, but according to the NNPCL that agreement will expire by March and wants it renegotiated.
With the deal, Dangote Refinery sold to Nigerian marketers in naira because it buys crude in the local currency through NNPCL.
In the past few months, the price of premium motor spirit fell to at least N860 per litre as a price war between Dangote Refinery and NNPCL kicked off.
“We wish to inform you that, Dangote Petroleum Refinery has temporarily halted the sale of petroleum products in Naira. This decision is necessary to avoid a mismatch between our sales proceeds and our crude oil purchase obligations, which are currently denominated in U.S. dollars.
“To date, our sales of petroleum products in Naira have exceeded the value of Naira-denominated crude we have received. As a result, we must temporarily adjust our sales currency to align with our crude procurement currency,” Dangote Refinery said in a statement on Wednesday.
