Di announcement make many pipo fear say petrol price go jump up. But di true tin be say di reverse be di case. Although Dangote refinery don switch to dollar pricing for im petrol, di naira equivalent of im ex-depot price remain di same when you use di official exchange rate. Di price be N1,072 per litre, wey dey di same as before. So marketers no dey pay more for petrol than dem dey pay before di currency change. But di wahala still dey for di future—how dis go affect Nigeria foreign exchange market, inflation, and fuel pricing if e become permanent.
Why Dangote switch to dollar pricing? Di refinery decision na based on commercial reality. Dangote Refinery dey buy crude oil for dollars, plus other logistics costs, taxes, and levies wey dey priced for dollars. Di refinery suppose get crude from Federal Government through di naira-for-crude deal with Nigerian National Petroleum Company Limited (NNPC Ltd). Under dat policy, crude go dey supplied for naira, so di refinery go sell refined products for naira without foreign exchange risk. But reports say di crude allocations under di arrangement no reach wetin di refinery need. So dem dey force to source extra crude from international suppliers and pay for dollars.
Why petrol prices no dey increase immediately? Despite public worry, di move to dollar pricing no mean say petrol price go rise. Di refinery just convert dem existing ex-depot price to dollars using di exchange rate. As long as naira remain stable, marketers go pay almost di same amount for naira after dem convert dia dollars. So di change na about di currency of payment, not di value of di product. Checks show say pump prices no change, and filling stations for Lagos dey normal. One source close to di refinery say, “Dis decision na commercial decision to ease pressure of sourcing dollars to import crude, since di naira-for-crude deal with federal government no achieve much result. Di crude supply obligation from government no dey met. We only get three cargoes monthly when we need about 15 cargoes. Over 70% of our feedstock dey from importation. But wetin di refinery do na to ensure product availability no stop.”
Wetin fit change? Di situation go change if naira depreciate. For example, if exchange rate move above current N1,376/$, marketers go need more naira to buy di same petrol, and di extra cost go pass to consumers. Dis mean say domestic fuel prices go directly link to movements for Nigeria foreign exchange market. Economists say dis go put pressure on Nigeria forex market.
Wetin experts dey talk? Chief Executive Officer of Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, believe di move reflect growing volatility for global oil market, not attempt to arbitrarily increase prices. According to am, refiners worldwide dey face uncertainty as geopolitical tensions push crude oil prices up and down. Businesses dey adopt pricing strategies to protect dem from commodity price swings and exchange rate risks. Oil and gas analyst Dr Ayodele Oni also see di decision as commercially rational. According to am, once crude dey bought for dollars and products dey sold for naira, di refinery dey assume exchange rate losses when naira weaken. Pricing products for dollars allow di refinery to align revenue with foreign currency obligations. Otunba Tunji Oyebanji, oil and gas industry analyst, tell Daily Trust say, “Dis mean say di crude arrangement no dey work as expected. We don talk from di beginning say dis na tall order. Nigeria no dey produce enough crude. Dem don pledge some crude to third parties, take advanced money from buyers, and dey pay dem back with crude. Dat limit di amount of crude available to sell to Dangote or international market. Crude oil na our number one export earner. I no dey stand for NNPC. I just dey say dis fit be di challenge wey make di arrangement no work. Di implication be say more of Dangote crude go come from outside Nigeria, and e go pay dollars. So I think dat why e decide to sell for dollars. Di implication na say e go increase demand for dollars, and naira fit weaken.”
