MOTORISTS and other petroleum users are likely to pay higher costs as Dangote Petroleum Refinery said it has temporarily suspended the sales of petroleum products in naira pending when it resumes receiving an allocation of naira-denominated crude cargoes from the Nigerian National Petroleum Company (NNPC) Limited.

By implication, most Nigerian petroleum users are likely to pay for higher cost of petroleum products at filling station retail outlets since the naira-for-crude deal with NNPC has been suspended and exposing consumers to payment of the product in direct dollar cost equivalent.

The management of the Dangote Group said in a statement issued on Wednesday, March 19.

It said, “We wish to inform you that Dangote Petroleum Refinery has temporarily halted the sale of petroleum products in Naira.

“This decision is necessary to avoid a mismatch between our sales proceeds and our crude oil purchase obligations, which are currently denominated in United States dollars.”

According to the refinery, the sales of its petroleum products in naira have exceeded the value of naira-denominated crude it has received to date.

“As a result, we must temporarily adjust our sales currency to align with our crude procurement currency,” it said.

The refinery, however, denied media reports making the rounds that it was stopping the loading of petroleum products due to an incident of ticketing fraud.

“This is a malicious falsehood. Our systems are robust, and we have had no fraud issues.

“We remain committed to serving the Nigerian market efficiently and sustainably. As soon as we receive an allocation of Naira-denominated crude cargoes from NNPC, we will promptly resume petroleum product sales in Naira,” Dangote management added.

The ICIR reported on March 10 that the naira-for-crude deal ends this month, but that the NNPCL said it had initiated a conversation with the Dangote refinery for possible renewal.

In a statement to refute reports that it had suspended the naira-for-crude deal, the state-owned oil company clarified it was in talks with Dangote refinery to extend the contract.

This comes as the 650,000 barrels per day (bpd) refinery gradually increases its output.

In a later publication, The ICIR also reported that the Dangote refinery was sourcing crude oil from multiple international suppliers, including Angola and Algeria, to ramp up production.

The report revealed specifically that Dangote Refinery has taken delivery of more than three million barrels of American crude since the start of the month.

It has also made purchases closer home, importing a shipment of Angola’s Pazflor grade and a cargo of Algeria’s Saharan blend from Glencore Plc in recent weeks.