As the crisis of petrol supply rages due to dependency on import, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has asserted that Nigeria can save about $21 billion of Foreign Exchange (FX) in a year if the products are refined locally.
According to the Central Bank of Nigeria’s October 2022 Economic Report, the country spent a total of $12.44 billion on the importation of petroleum products between January and October of 2022.
The National Bureau of Statistics’ Fourth Quarter report of 2022 said Nigeria spent N1.79 trillion on the importation of petrol and diesel.
In October 2021, the CBN Governor, Mr Godwin Emefiele, had lamented that the country spends almost 40 per cent of its scarce foreign exchange on the importation of petroleum products as well as petrochemicals, which continues to put pressure on the naira exchange rate.
Nigerians are currently grappling with the sudden increase in the price of petrol following the removal of government subsidy on the import of the product and subsequent deregulation of the downstream aspect of the oil and gas sector.
Speaking on Arise News Morning Show on Friday, National Operations Controller of IPMAN, Mike Osatuyi, said if the government fully repairs the refineries as promised and Dangote Petrochemical Refinery begins to work, they would collectively help to scale up local production and remove all the costs associated with import which currently makes the prices to be high.
Osatuyi said: “We are going to save about $21 billion foreign exchange if we are producing in Nigeria. About $10 billion will be safe in terms of shipping abroad and the income to Nigeria and then even the subsidy on importation also, we will save another $11 billion per year. In fact, the value of the naira will increase because there’s going to be less pressure on Dollar. The naira will continue to have value, then the GDP will go up, there will be employment and the issue of scarcity will go forever.”
The IPMAN national controller of operations said the marketers are in full support of deregulation, noting that it would engender healthy competition in the market.
He said there will be stability in the market once full deregulation set in. He referred to diesel, kerosene and aviation fuel which are already deregulated, saying they no longer have the problem of supply.
On why marketers jacked up the price of petrol immediately after the fuel subsidy removal was announced, Osatuyi said NNPC increased the amount with which they sold to them, immediately after the announcement was made. This he said, left them with no option than to increase the pump price in order to meet up with the cost of getting new stock.
He said some depot owners also stopped loading tanker trucks only for them to start when the new price increase was released by the NNPC.
Osatuyi, however, disclosed that the price of petrol may go above the current N500 per litre in Lagos, if depot owners increase the price they buy from them.
According to him, “Let me tell Nigerians clearly today that the N500 we are selling in Lagos now is because there are still old stocks. By the time depot owners start buying and selling to IPMAN members, it may not come for N500. It is going to be above N500 in Lagos, that’s the fact, because we can’t buy petrol at N488, put in my transport and it gets to my station at N505 and then you ask me to sell at N500.”
Commenting on the current fuel crisis across the country, Babatunde Irukera, Executive Vice Chairman and CEO, Federal Competition and Consumer Protection Council (FCCPC), condemned the action of marketers who stopped selling or jacked up prices immediately after the subsidy removal was announced by President Bola Tinubu on Monday.
Irukera said that act by marketers was partly responsible for the panic-buying that occurred in the last few days.
“What created the run in the market is a knee-jerk reaction by marketers in a very small period of time and there is nothing that justifies that. It essentially destabilized the entire community,” Irukera said
He said FCCPC has a task force team moving around monitoring how marketers are treating consumers in terms of distribution and pricing of the product.
Credibility and transparency is our DNA at Prime Business Africa’. We strongly believe in the role of media as a watchdog of the society that powerfully promotes accountability and transparency in government.
By contributing to Prime Business Africa, you are helping to sustain good journalism and making sure that it remains free to all.