Fuel Prices Hike Looms As Dangote Halts Sales In Naira
. Cites Mismatch Between Sales, Purchase Denominations
. NNPC Assures Port Harcourt Refinery Fully Operational
By Sulaimon Salau
There have been growing concerns on the likely shift in domestic fuel prices in the coming days, as Dangote Petroleum Refinery temporarily halted the sale of petroleum products in Naira.
The company, in a public notice made available to Slye News, said the decision was necessary to avoid a mismatch between our sales proceeds and our crude oil purchase obligations, which are currently denominated in U.S. dollars.
This is coming as the Nigerian National Petroleum Company Limited (NNPC Ltd) assured that despite a minor incident at a section of the Port Harcourt Refining Company (PHRC) (Wednesday), the plant remains operational and continues to produce on-spec refined petroleum products.
However, Dangote Petroleum explained: “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,”
It further denied the reports on the internet claiming that the company has stopped loading due to an incident of ticketing fraud. “This is malicious falsehood. Our systems are robust and we have had no fraud issues”, it stated.
“We remain committed to serving the Nigerian market efficiently and sustainably. As soon as we receive an allocation of Naira-denominated crude cargoes from NNPC, we will promptly resume petroleum product sales in Naira,” Dangote assured.
Meanwhile, the Chief Corporate Communications Officer, NNPC Ltd, Olufemi Soneye, in a separate statement, assured the public that there is no cause for concern, as all sections of the recently rehabilitated plant are in full operation.
Reacting to the new development, the Centre for the Promotion of Private Enterprise, (CPPE), has warned Nigerians that Dangote Refinery’s decision might lead to a hike in the price of petrol and depreciation of the Naira.
Chief Executive Officer, CPPE, Dr Muda Yusuf, in a statement on Wednesday stated that Dangote’s decision would significantly alter the dynamics of domestic petroleum product pricing and increase pressure on foreign exchange.
“This is a disturbing development. It will significantly change the dynamics of domestic petroleum product pricing. The sustainability of the widely celebrated deceleration of petroleum product prices is now evidently at risk. We may see a reversal of the trend.
“There are other macroeconomic implications. Demand pressure on the forex market would be elevated, resulting in an exchange rate depreciation scenario. The foreign reserves may come under pressure. All of these could result in adverse macroeconomic outcomes with profound implications for investor confidence,” CPPE stated.
