The Centre for the Promotion of Private Enterprise, CPPE, has warned Nigerians that Dangote Refinery’s decision on Wednesday to sell its petroleum products in dollars will lead to a hike in the price of premium motor spirit and the depreciation of the naira.
CPPE Chief Executive Officer, Dr Muda Yusuf, disclosed this in a statement on Wednesday.
He made this remark following Dangote Refinery’s announcement of its temporary suspension of petroleum product sales in naira.
Reacting to the development, CPPE stated that Dangote’s decision would significantly alter the dynamics of domestic petroleum product pricing and increase pressure on foreign exchange.
“This is a disturbing development. It will significantly change the dynamics of domestic petroleum product pricing. The sustainability of the widely celebrated deceleration of petroleum product prices is now evidently at risk. We may see a reversal of the trend.
“There are other macroeconomic implications. Demand pressure on the forex market would be elevated, resulting in an exchange rate depreciation scenario. The foreign reserves may come under pressure. All of these could result in adverse macroeconomic outcomes with profound implications for investor confidence,” CPPE stated.
Recall that the federal government initiated the naira-for-crude deal with Dangote Refinery in October last year.
Earlier, the Nigerian National Petroleum Company Limited, NNPCL, confirmed its ongoing discussions with Dangote Refinery for a fresh contract under the naira-for-crude arrangement.
During the naira-for-crude deal, Dangote Refinery sold to Nigerian marketers in naira because it purchased crude in the local currency through NNPCL.
Nigerians currently buy petrol at prices ranging from N860 to N970 per litre in Lagos and Abuja.
Fuel price hike, naira depreciation — CPPE on Dangote Refinery’s sales of petrol in dollars
