Petrol queues may soon return to the country following claims by oil marketers that they can no longer import premium motor spirit (petrol) because the falling rate of the naira against the US dollar ($1 to N420) makes it unviable to do so.
This would then leave the Nigerian National Petroleum Corporation (NNPC) with the sole responsibility of importing petrol. Meanwhile, experts say the NNPC does not have the capacity to fulfil that function by itself.
There is however a window of hope, as Ibe Kachiukwu, minister of state for Petroleum, is said to have pledged to the marketers that he would make a case for the CBN to sell dollars to them at the rate of N305 because of the sensitivity of their function. The interbank dollar exchange rate for last week was N308.
There is however a window of hope, as Ibe Kachiukwu, minister of state for Petroleum, is said to have pledged to the marketers that he would make a case for the CBN to sell dollars to them at the rate of N305 because of the sensitivity of their function. The interbank dollar exchange rate for last week was N308.
Before this development, the oil marketers were struggling to source for foreign exchange from the autonomous and black markets, to bring in petrol under an arreangement in which the NNPC was allocating foreign exchange to them.
Attempts by the NNPC in the past to be the sole importer of petrol had resulted in acute scarcity , with long queues at filling stations.
Olufemi Adewole, execuitive secretary of the Depots and Petroleum Products Marketers Association of Nigeria (DAPPMA) told BusinessDay that any marketer who buys petrol from the international market at a price above N305 to $1 might not get buyers because those terms would mean selling at a loss.
While Olufemi Olawore, executive secretary of the Major Oil marketers Association Of Nigeria (MOMAN) confirmed to BusinesDay the minister’s resolve to ensure that marketers get a fair deal from the CBN to ensure that they import fuel.
Some of the operators who spoke to BusinessDay said with the black market exchange rate at N420 to a $1, it is impossible for them to import the product and sell at N145 per litre.
He said the only condition under which they can bring in the product is if they are able to get foreign exchange at N305 to $1 which the CBN is said to be considering, following the intervention of Kachiukwu.
Some of the operators said International Oil Companies (IOCs) had refused to sell dollars to them at the interbank rate and so they cannot continue to import.
Some of the operators said International Oil Companies (IOCs) had refused to sell dollars to them at the interbank rate and so they cannot continue to import.
BusinessDay had earlier reported that there was apprehension in the downstream subsector of the petroleum industry with the new arrangement in which the NNPC assumed full control of allocating foreign exchange to oil marketers for importation of Premium Motor Spirit [PMS).
According to industry sources, the NNPC assumed the role of allocating forex to the marketers on paper and requested IOCs to fund them.
Most times however, the rate used by the IOCs is higher than the interbank rate and this leads to delays in accessing the forex for importation of petrol.
There was the fear then, that the new arrangement would cause the oil marketers undue delays in bringing the product to the market ,thereby creating a gap which could result in fuel scarcity in the nearest future.
There was the fear then, that the new arrangement would cause the oil marketers undue delays in bringing the product to the market ,thereby creating a gap which could result in fuel scarcity in the nearest future.
Olusola Bello
