Following the recent fuel scarcity, private oil marketers call on the government intervention to enable them access foreign exchange at a special rate for the importation of Premium Motor Spirit (petrol), The Punch reports.
Juicy Links learnt that according to the marketers, selling the product at N145 per litre is no longer feasible with the current exchange rate.
Juicy Links also learnt that marketers had stopped fuel importation due to shortage of foreign exchange and increase in crude prices. According to them this had made it unprofitable to import and sell petrol at N145 per litre
Mike Osatuyi, the National Operations Controller, Independent Petroleum Marketers Association of Nigeria, said: “The problem is that the importation (of petrol) is being handled almost 100 per cent by the Nigerian National Petroleum Corporation as private importers have backed out because the increase in crude price has made the landing cost enter subsidy.
“When the crude price hit $59 per barrel, we could not sell petrol again at N145 per litre if we were importing on our own. It is only the government (NNPC) that is importing and can warehouse the subsidy.”
Osatuyi noted that the government through the Central Bank of Nigeria (CBN) should have intervened by providing foreign exchange at a special rate solely for the PMS importation for both the NNPC and private importers.
He said: “Right now, the landing cost of the PMS is N154. If you are importing at N305 to the dollar, by the time you add bank charges, it comes to N307 to the dollar. If you apply that to the current crude price, the landing cost is N154-N155. By the time you add all the margins, the pump price is about N160-N167.
“Before private importers can resume importation, the exchange rate to a dollar must be N250 and we can sell at the price of N145 per litre.”
A top official of a Lagos-based oil marketing company speaking on condition of anonymity, said:
“Unless government gives another ceiling price, it will not be good to sell at the current price if you import now. It is expensive to import now. Some people who have customers they don’t want to lose can just do small imports.”
Meanwhile the Lagos Chamber of Commerce and Industry (LCCI), have also expressed concerns about the current state of the nation’s downstream petroleum sector, especially a situation whereby the NNPC has become the sole importer of the product into the country.
Muda Yusuf, the director general, LCCI, in an interview with The Punch said: “It’s unfortunate that fuel queues have returned. But there is a very fundamental problem with our petroleum downstream sector, and the problem is that it is over-regulated. You cannot have a sector as big as that serving our size of population and we expect only the government provider to be supplying fuel. It is not a sustainable model.
“So, there is an urgent need to push back the role of government in the issue of retailing fuel, importing fuel and all of that. Right now, it is only the NNPC that is importing the PMS. Such a thing cannot be efficient; it creates room for all manner of abuses; some of which the marketers cannot disclose because of their own businesses.”
Yusuf said the private sector should be allowed to play a bigger role in importation, refining, distribution, marketing and other activities in the downstream sector.