Fakoyejo OlalekanOil marketers in Nigeria have revealed the reason importing fuel alongside the Nigerian National Petroleum Company (NNPC) Limited might be impossible.
It was stated that their inability to source foreign exchange with the official rate could have dire consequences on private companies that decide to import fuel.
According to a report, it was gathered that the NNPC obtains forex from the Central Bank of Nigeria (CBN), which sells the dollar at N461/$1, however, the oil marketers still largely depend on the black market where USD is sold above N700.
This makes it impossible for oil marketers to compete with the NNPC, as the ex-depot price when forex is sourced from the black market is between N505/litre and N515/litre, but the ex-depot price based on the CBN rate is N467.39/litre.
Ex-depot price is the cost of fuel when it lands on the shore of Nigeria, excluding transportation costs across the country and profit margins.
“The exchange rate of N761/$ at the parallel market is what we are battling with as I’m talking to you right now, because that is where most marketers source their dollars. NNPCL’s ex-depot price is not realistic for other marketers, because they (NNPCL) source their dollar cheaper, which is at the N461/$ CBN rate.
“So if any marketer is importing today, the cheapest ex-depot price that has been calculated for us is not less than N505/litre; some are as high as N511/litre, while others are as high as N515/litre,” a source within the Independent Petroleum Marketers Association of Nigeria (IPMAN) told Punch on Monday.
The source disclosed that NNPC is still the sole importer of fuel into Nigeria, as private companies haven’t joined in the importation business.
Another member of IPMAN, simply identified as Ukadike asked that oil marketers should be allowed to access forex through the same channel as NNPC.
He said Nigeria’s oil industry is now operating a deregulated market so there needs to be competition, “The NNPCL is importing and has not given people the opportunity to join them in importing, so as to see whether private sector operators can import the product cheaper or not.
“So there is no competition. In a deregulated regime, there must be competition, everyone with capacity should be allowed to import,” Ukadike stated.
Ukadike lament that oil marketers can’t survive should they continue to depend on the black market when they start importing fuel.
In his explanation, he said: “Marketers can import, but let me tell you some of the factors militating against this. The first is that there won’t be availability of dollars.
“You will source your dollar from the parallel market and if you are not careful in doing this, and you go into the importation of petroleum products, you might not come out of it alive at the end of the day.
“So what we are saying is that those advantages that NNPCL has, should be shared with other major importers of petroleum products. If it is through crude buy-back, they should let us know, so that independent players such as IPMAN members, can gather to pay and be able to use it in the buy-back model.”
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