…Raises concern over Dangote petrol pricing in dollars
An energy expert has called on the Federal Government to strengthen its crude-for-naira policy, expressing concern over Dangote Refinery’s pricing of petroleum products in the United States dollar.
Joseph Obele, a Lecturer at the Ignatius Ajuru University of Education, Port Harcourt, and National Public Relations Officer of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), expressed concern over the reported decision by Dangote Refinery to suspend the sale of petroleum products in naira and transition to dollar-denominated transactions.
In a statement made available to BusinessDay in Port Harcourt, Obele said that the Federal Government should rather “expand the crude-for-naira policy to ensure that domestic refineries receive sufficient crude oil to meet their production requirements.
“The Nigerian National Petroleum Company Limited (NNPCL) should allocate additional crude oil to domestic refineries to reduce dependence on imported crude and support naira-denominated transactions.
“The Central Bank of Nigeria (CBN), the Federal Ministry of Petroleum Resources, and relevant regulatory agencies should provide clear policy guidance on the currency to be used for domestic petroleum transactions in order to preserve confidence in the naira.
“Government should intensify efforts to stabilise the foreign exchange market through increased crude oil production, improved export earnings, and policies that strengthen the value of the naira.
“All stakeholders in the petroleum industry should work collaboratively to ensure that commercial decisions support not only business sustainability but also Nigeria’s broader economic stability, energy security, and long-term national interest.”
Obele, who said that every investor deserved a fair return on investment, insisted that policies and business decisions within strategic sectors such as petroleum should carefully balance commercial realities with their wider implications for the Nigerian economy and the welfare of citizens.
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He said that a media report that announced Dangote Refinery’s suspension of naira sales raised widespread concerns among industry stakeholders about the potential consequences for the nation’s economy.
Obele described the development as a significant policy concern, warning that while businesses have commercial considerations, decisions of that magnitude must also take into account their broader economic implications for the nation.
He noted that the energy sector remains the backbone of Nigeria’s economy and that major decisions affecting petroleum pricing and transactions have direct consequences for government revenue, businesses, investors, and the welfare of millions of Nigerians.
Obele noted that some analysts had backed Dangote’s action as it sources crude oil from the international market and pays in United States dollars, since the volume of crude supplied under the Federal Government’s crude-for-naira arrangement may be insufficient to meet its production requirements.
But, he recalled that the Federal Government had discouraged the collection of school fees in foreign currencies by some international schools operating in Nigeria in order to protect the naira and preserve monetary stability.
He therefore asked if products sold within Nigeria should be priced and paid for in a foreign currency.
According to him, the greatest concern is not merely the immediate effect of the decision but the precedent it could establish if other major manufacturers, producers, and service providers began demanding payment in foreign currencies.
According to Obele, in such a situation, the demand for the United States dollar would rise significantly, placing additional pressure on the foreign exchange market.
“Such a trend could lead to increased scarcity of foreign exchange, further depreciation of the naira, higher production costs, and widespread inflation across virtually every sector of the economy,” he stated.
He said that it could lead to increased pressure on the naira, rising inflation, higher cost of doing business, increased cost of living, reduced industrial productivity, increased demand for foreign exchange, a dangerous precedent, reduced investor confidence in monetary stability, slower economic growth, and higher poverty levels.
