Dangote Refinery has halted the sale of petroleum products in Naira to the domestic market after the Federal Government failed to renew the crude-for-Naira agreement with the Nigerian National Petroleum Company Limited (NNPCL).
In a statement issued yesterday, the refinery explained: “Dangote Petroleum Refinery has temporarily suspended the sale of petroleum products in Naira. This decision is necessary to prevent a mismatch between our sales proceeds and crude oil purchase obligations, which are currently in U.S. dollars.”
The statement continued: “So far, our sales of petroleum products in Naira have surpassed the value of Naira-denominated crude we have received. As a result, we must temporarily adjust our sales currency to match the currency used in crude procurement.”
The refinery also responded to online rumors suggesting a suspension due to a ticketing fraud incident, calling it “malicious falsehood.” It reassured the public that its systems are secure and free from fraud.
“We remain dedicated to serving the Nigerian market efficiently and sustainably. Once we receive Naira-denominated crude cargoes from NNPC, we will resume sales in Naira without delay,” the statement concluded.
Dangote Group President, Alhaji Aliko Dangote, met with the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, in Abuja on Tuesday in a last-ditch effort to salvage the Naira-for-Crude deal, but was unsuccessful.
While the government previously denied reports that the Naira-for-Crude arrangement had ended, Dangote Refinery’s current stance clearly indicates that the deal has been terminated.
Implications:
The suspension is expected to have widespread effects, potentially driving up petrol prices and worsening the challenges of obtaining U.S. dollars in the foreign exchange market. This could also contribute to the dollarization of the Nigerian economy, an issue the federal government had previously pledged to combat.
