Nigeria's oil market is experiencing a state of panic buying, as oil marketers are amassing Premium Motor Spirit (PMS), also known as petrol, in anticipation of a fuel price increase. This development comes as Dangote Refinery faces a dollar problem, following the suspension of the Naira-for-Crude initiative, which allowed local refineries to buy crude in local currency.

The halt in the Naira-for-Crude initiative has led to concerns about a potential fuel crisis, with retailers hoarding fuel to guarantee they have enough to sell at a higher rate. Depot owners are already increasing the price, leading to concerns about profiteering. According to the Independent Petroleum Marketers Association of Nigeria (IPMAN), this could lead to heavy losses for hoarders.

Chinedu Ukadike, the National Publicity Secretary of IPMAN, warned that some filling stations were racing to gather fuel, while depot owners were making money. "Some depot owners are already increasing the price. But we are also asking our marketers not to panic-buy. Because definitely when the Dangote refinery comes back and reverses the price, it will be a huge loss for these marketers. Depot owners are using this opportunity to profiteer. This is not good for the economy," he stated.

Ukadike also noted that the projections could be wrong, leading to a loss for hoarders. "Dangote may crash the price and most of them with high volumes of PMS will run into problems. So, all marketers should be careful to avoid losses," he advised.

The Naira-for-Crude initiative was discontinued by the Nigerian National Petroleum Company (NNPC) Limited, which involves selling crude to regional refineries in the nation's currency. The report that the NNPC had forward-sold all of its crude, even though production levels were greater now than when the arrangement started almost six months ago, served as the basis for the decision.

Despite the current uncertainty, Ukadike pointed out that the suspension of the Naira-for-Crude initiative was not a foregone conclusion, and that discussions are still being held. "I have gathered that the Federal Government and Dangote refinery are almost resolving this matter," he stated. "The two of them are reviewing the naira-for-crude deal to continue the sale of crude oil in naira to the refinery again. But the official statement has not come out. We are waiting for the official statement," he continued.

The developments in Nigeria's oil market have significant implications for the economy, with potential losses for hoarders and concerns about profiteering. As the situation unfolds, it remains to be seen how the Federal Government and Dangote Refinery will resolve the Naira-for-Crude initiative, and what the ultimate impact will be on the oil market and the economy as a whole.