The pump price of Premium Motor Spirit (PMS), commonly known as petrol, may increase further in the coming days due to a rise in the landing cost of imported fuel and the suspension of naira payments by Dangote Refinery, according to a report by The PUNCH.

Rising Landing Costs and Fuel Imports

Recent data from the Major Energies Marketers Association of Nigeria (MEMAN) shows that the landing cost of imported petrol rose from ₦797 per litre last week to ₦885 per litre this week—an ₦88 increase in just one week.

This new landing cost exceeds the Dangote refinery’s ex-depot price of ₦815 per litre by ₦70, meaning imported petrol could soon hit ₦1,000 per litre at filling stations after adding transportation and distribution costs.

Impact of the Naira-for-Crude Suspension

The Dangote refinery recently suspended its sale of petroleum products in naira, citing the Federal Government’s failure to continue the naira-for-crude agreement. In a statement, the Dangote Group explained that the decision was necessary to prevent a financial imbalance between their sales proceeds in naira and their crude oil purchases in US dollars.

“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,” the Dangote Group stated.

Following this announcement, the cost of loading petrol at private depots in Lagos increased to about ₦900/litre, up from ₦850/litre.

Fuel Scarcity Fears and Depot Owners’ Response

With the uncertainty surrounding the naira-for-crude deal, many filling station owners are stockpiling fuel, anticipating price increases. Depot owners, who have lost revenue due to Dangote’s price cuts, have urged the Federal Government to abandon the naira-for-crude policy.

The Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) expressed concerns that the policy could destabilize the naira and deter foreign investments.

“Crude oil transactions are traditionally conducted in US dollars due to its stability and global acceptability. We believe the naira-for-crude framework poses significant risks to Nigeria’s foreign exchange stability,” said Olufemi Adewole, Executive Secretary of DAPPMAN.

MEMAN’s Position on Deregulation

During its Q1 2025 Press Training & Engagement in Lagos, MEMAN defended the ongoing deregulation of the downstream petroleum sector, stating that price changes are inevitable in a market-driven system.

“Transitioning from a state-controlled system to a competitive, deregulated market is essential for fostering efficiency, transparency, and long-term economic growth,” said Clement Isong, MEMAN’s Chief Executive Officer.

MEMAN emphasized that while price increases may cause temporary resistance, deregulation will attract investment, improve efficiency, and create a competitive market.

Petroleum Marketers Urge Government Intervention

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) urged the Federal Government to prevent the Dangote refinery from selling petrol in US dollars to local marketers.

“Allowing the sale of petroleum products in dollars will increase pressure on foreign currency, worsen inflation, and further hurt the economy,” said Billy Gillis-Harry, PETROAN’s National President.

He called on the government to ensure that all domestic transactions are conducted in naira to protect the economy and the welfare of Nigerians.

What Lies Ahead?

With the rising landing costs, foreign exchange volatility, and the suspension of the naira-for-crude agreement, fuel prices are expected to rise further. Industry stakeholders continue to debate whether government intervention or market forces should dictate the future of Nigeria’s downstream petroleum sector.