Crude Oil Refinery Owners Association of Nigeria has projected that importers of petroleum products in Nigeria may soon go out of business if they refuse to follow local refining trends. CORAN stated this as the Federal Government ordered the return of the naira-for-crude deal despite calls for its cancellation by the Depot and Petroleum Products Marketers Association of Nigeria. In an interview with our correspondent, the Publicity Secretary of CORAN, Eche Idoko, dismissed the claims by DAPPMAN that the sale of crude to local refineries in naira affected the economy negatively. According to Idoko, the depot owners, who are primarily importers of petroleum products, made the claims because they would not want to go out of business. He argued that those who own depots to store imported products will not want the refineries and the pipelines to function as their functionality would send them out of business. “We understand why they (the importers) wanted the Federal Government to cancel the naira-for-crude deal. For them, they would not want to go out of the market. And I keep telling you, a man who has drums that store water in order to make money, would not want the pipes to run. Because if the pipes start running, his drums go out of business. That’s what tank farm owners do,” Idoko stated. The CORAN spokesman said appeals were made to the depot owners to re-strategise so as to remain relevant when Nigeria becomes a refining hub. However, Idoko said the importers remained adamant in the business of fuel importation, saying they would go out of business because refining has come to stay in Nigeria. “Unfortunately, we are asking them to come so that we can re-strategise and change their business strategy so they can remain relevant when Nigeria becomes a refining hub, but they are not forthcoming. “Well, as long as they decide to keep to that position, at some point, they will all go out of business. Because refining in Nigeria has come to stay,“ he stressed. Idoko worried that some individuals are still hellbent on continuing a regime of importing substandard fuel into the country. He explained that importers do not want local refining to succeed, and they have since resorted to kicking against the naira-for-crude deal. According to him, the price of petrol was heading to N700 per litre before the naira-for-crude deal was discontinued, adding that the price ought to have dropped further with the crash in crude oil prices across the globe if not for the suspension of the naira deal in March. “The price of PMS continued to rise because these middlemen are the elements that want to see that local refining is not sustained. When we turned to local refining in this country, we saw the price of petroleum products dropping. And it was going to go down more as the crude prices crashed. “Unfortunately, we have middlemen who pride themselves as agents. They have no scheme in the game other than that they have fixed prices because they don’t have risk. All they do is to connect Nigerian consumers with international traders and then make their money and go away. So, they don’t have anything to lose. They have no investment in this business. They just come in as agents, make money, and then cash out,” he stated. Idoko said, “It is foolhardy for anybody to think that in their bid to continue a regime of importing substandard petroleum products, they could thwart the naira-for-crude policy. We appreciate the Federal Government for bringing back the naira-for-crude deal.” The naira-for-crude deal ordered by President Bola Tinubu allowed the sale of crude in naira to the Dangote refinery, prompting a crash in fuel prices. With the supply of crude in naira, the Dangote refinery continued to crash petrol prices across the country. From about N1,100 per litre, the company slashed the price of premium motor spirit to N860. But importers of petroleum products lamented the repeated reduction of petrol prices by the refinery. Some of the importers lamented that they were compelled to sell below their costs, as consumers only buy from where the product is cheaper. While Nigerians were rejoicing over the price slashes, fuel importers and retailers said they were counting losses. Sunday PUNCH reports that importers lost an average of N2.5bn per day and N76.5bn in a month due to Dangote’s sudden price changes in March. With the belief that the naira-for-crude deal was giving Dangote an undue advantage over its competitors, the Depot and Petroleum Products Marketers Association of Nigeria asked the Federal Government to cancel the deal, arguing it was inimical to the country’s economy. The DAPPMAN Executive Secretary, Olufemi Adewole, disagreed, saying, “The naira-for-crude-oil transaction framework presents significant risks that could affect Nigeria’s foreign exchange stability and deter foreign direct investment.” Adewole emphasised that crude oil transactions are traditionally carried out in US dollars due to its stability and global acceptability. He stressed that failure to align with this international standard could isolate Nigeria from global markets, diminishing trade opportunities and discouraging investment inflows. “The global oil market operates in US dollars due to its stability. Continuing the policy could alienate trade partners and investors who rely on the predictability of the dollar,” he stated. However, the Federal Government ignored DAPPMAN’s call for cancellation, ordering that the naira-for-crude deal should continue indefinitely.
