Victor Ezeja
Players in the downstream sector of Nigeria’s oil industry have lamented that 90 per cent of depots operated by independent oil marketers are currently closed owing to the volatility in the foreign exchange (forex) market and difficulties in the local distribution channel.
This was as the Executive Director of Northwest Petroleum and Gas Limited, Mohammad Salaudeen disclosed that owing to the spiraling cost of operations, barely 10 percent of the marketers licensed to import petroleum products since deregulation could do so at the moment.
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He spoke on Wednesday as a representative of the company’s MD/CEO, Winifred Akpani, on a panel session titled “Africa Fuels’ Update: Overview of Trends and Market Developments,” at the ongoing Oil Trading and Logistics (OTL) Africa Week 2023 in Lagos
Salaudeen said operations by independent marketers from the importation of Premium Motor Spirit (PMS), otherwise called petrol, to its distribution to the end users have been stiffened by the fluctuating dollar/naira exchange rates, leading to a high cost of operations.
“We’ve seen the Nigerian National Petroleum Company (NNPC) Limited retail stations not operating at some point. If NNPC stations are not operating, what happens to people like us?
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“The challenge today is that, firstly, we can’t import the product,” he said, adding that “the NNPC brings it in in smaller volumes. So what will get to us…We’ll have to wait.”
The executive director further revealed that when marketers put forth their request, it’s like they are in a queue, “when it gets to your turn, you’ll get it. That is the challenge of today.”
“Unfortunately, we have to wait for quite some time for us to be able to move forward on this and that’s the position that marketers face.”
In an earlier remark, Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory (NMDPRA), Farouk Ahmed disclosed that eight wholesale petroleum product suppliers out of 94 licensed oil marketers were granted import permissions and supplied eight cargoes of PMS totaling 251,000 MT (291,238,670.69 litres) between June and September 2023.
He however expressed optimism that efforts by the federal government to restore the stability of the harmonised foreign exchange market will assist in the importation of petrol by other oil marketing companies in addition to the state-owned oil companies.
Meanwhile, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has claimed that the 21 depots operated by the Nigerian National Petroleum Company Limited (NNPCL) are not functioning.
According to the Association’s Zonal Chairman for Southwest, Dele Tajudeen, “Without mincing words, none of the depots are working.”
Tajudeen, who represented the IPMAN National President, Chinedu Okoronkwo, stated that the only option left is to explore private depots across the country.
“Once these depots start working, a marketer in Kaduna won’t have to come to Lagos to move products.
“When all these are put in place, the traffic and the cost of transportation will be better.
“By the time we are in serious full deregulation… The price of the commodity will surely come down,” he said.
