The refinery recently informed marketers that payments for Premium Motor Spirit (petrol), Automotive Gas Oil (diesel) and aviation fuel for gantry and coastal transactions would henceforth be made in dollars, invalidating previously issued naira-based payment invoices.
The development has sparked widespread concern among operators in the downstream petroleum sector, with marketers urging the Federal Government to sustain the crude-for-naira arrangement introduced to support local refining.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) described the move as capable of encouraging the gradual dollarisation of the Nigerian economy if left unchecked.
PETROAN National President, Billy Gillis-Harry, acknowledged the refinery's right to make commercial decisions but argued that actions taken by a major player in the petroleum market should also reflect the country's broader economic interests.
He warned that marketers forced to purchase products in dollars could eventually transfer the additional costs to consumers, leading to higher pump prices.
Gillis-Harry also expressed concern that marketers would have to compete for scarce foreign exchange from commercial banks to sustain product purchases, a situation he said could further strain the downstream sector.
Despite the concerns, he expressed optimism that discussions among stakeholders would produce a solution without disrupting fuel supply nationwide.
Similarly, the Independent Petroleum Marketers Association of Nigeria (IPMAN) appealed to President Bola Tinubu to intervene by ensuring the continuation of the crude-for-naira policy.
IPMAN's National Publicity Secretary, Chinedu Ukadike, said fluctuations in crude oil prices and exchange rates already determine fuel prices, warning that increased dependence on the dollar would worsen market volatility.
He argued that greater demand for foreign exchange by marketers would inevitably increase operating costs and place additional financial burdens on consumers.
Ukadike urged the Federal Government and relevant agencies to act swiftly to preserve stability in the petroleum sector, especially amid global uncertainties affecting crude oil supply.
Following the refinery's announcement, petroleum depots across Lagos, Port Harcourt and Warri adjusted their loading prices in anticipation of higher replacement costs.
Industry data indicated that petrol prices rose by as much as ₦113 per litre at some depots, while diesel prices also recorded significant increases.
The refinery's decision, however, drew mixed reactions from energy experts.
Professor Emeritus Wumi Iledare, a petroleum economist, said the move should be viewed as a commercial strategy to manage foreign exchange risks rather than an attempt to manipulate prices.
According to him, a deregulated market allows producers to determine their selling prices, while competition ultimately dictates market outcomes.
He explained that because crude oil purchases and several refinery operating costs are dollar-denominated, aligning product sales with the same currency could reduce exposure to exchange-rate fluctuations.
On the other hand, energy law expert and University of Lagos professor, Dayo Ayoade, argued that petroleum products sold within Nigeria should ordinarily be priced in the country's legal tender.
While acknowledging the refinery's need to manage foreign exchange risks, he maintained that domestic transactions should remain naira-based and called on the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Federal Competition and Consumer Protection Commission (FCCPC), and the Central Bank of Nigeria (CBN) to examine the policy.
The Chief Executive Officer of Petroleumprice.ng, Jeremiah Olatide, also urged the Federal Government to revisit the crude-for-naira initiative, warning that pricing locally consumed petroleum products in dollars could worsen the cost burden on Nigerians.
The latest development has reignited debate over the implementation of Nigeria's deregulated petroleum market, with stakeholders divided over whether the refinery's decision is a legitimate commercial response to foreign exchange realities or a policy capable of increasing inflationary pressures on the domestic economy.
No comments:
Post a Comment