The notice delivered by the Dangote refinery on halting sales of fuel is stirring fear of price hikes. Experts who reviewed it concluded that it is a bit ambiguous and have explained it. The temporary suspension of sales of petroleum products which the notice addresses is not indefinite even though there is no time frame.

The notice opened with “We wish to inform you that, Dangote Petroleum Refinery has temporarily halted the sale of petroleum products in Naira.”

Experts explain that the refinery has a naira-for-crude agreement renewal with the government that is either coming up or is been delayed. Hence, dollar shortfall plays a huge part in the ongoing sales suspension.

The refinery has options and can continue to cover the dollar shortfalls as it did in the past. It can also import crude from outside the country or wait until the government is ready for renewal.

Nigeria has a statutory conventional agreement that says 445,000 barrels of crude will be set aside for local refining for national security. The stock was dug into when the refineries were closed for renovation for years.

Dangote refinery maintains its part of the stock with over 380,000 barrels a day, however, the government stalls with the renewal of the agreement.

Experts on the topic are analysing this differently. They suggest this could be a way of inflicting an injury on the prices of fuel. This is backed by the fact that – if tankers are unable to fill up with fuel from the refinery, the only other option is to go to Port Harcourt. The city has been chaotic, especially after a major pipeline explosion and the replacement of the state administration.

The suspension of sales will most likely last for as long as the negotiation between Dangote refinery and the government lasts.