What You Need To Know, As Six Nigerian Companies Get Fuel Importation License

Six oil companies have been given the approval to import petroleum products into Nigeria, starting from July 2023, the Managing Director of the Nigeria Mainstream and Downstream Petroleum Regulatory Authority (NMDRA), Farouk Ahmed, disclosed.

Ahmed, on Monday, 19 June, said the companies that received approval applied to start importing in the first month of the third quarter this year, but some companies whose application is still being processed are eyeing December. 

“There are six companies who said they want to import fuel in July. Of course, all the others may import in December in November, or anytime but those who expressed interest to bring in fuel in July there were six of them as of this morning. 

“The beauty of it is that there are interests which means that they have been able to have access to foreign exchange in order to import. 

“Now, as we go along, of course, we’ll be briefing you on the progress or the achievements so far, but the important thing is that NNPC has 30 days fuel sufficiency, so we do not anticipate any gap in supply or in distribution,” Ahmed said. 

What you need to know

NMDRA started issuing fuel importation licenses after the NNPC indicated that it will no longer be the sole importer following the complete deregulation of the oil industry. 

Recall that oil marketers had avoided importing fuel into Nigeria due to the disparity between the official and black market, with the dollar sold at N464/$1 in the former but was on sale above N700 in the latter before last week Wednesday.

Due to the scarcity of dollars, oil marketers can’t access the United States currency in the official market, but the NNPC, which was previously the sole importer, could obtain foreign exchange from the Central Bank of Nigeria (CBN). 

The oil marketers said it would be unfair and suicidal to start importing fuel into Nigeria by buying forex above N700/$1 in the black market, while the NNPC is obtaining forex from the CBN at about N460/$1. 

According to the oil marketers, NNPC would have a competitive advantage against them, except they are allowed to also buy from the CBN. 

However, with the unification of the multiple exchange rates, which has pushed the naira to N770.38/$1 in the official market, above the N757/$1 rate in the parallel market, the oil marketers are now interested in fuel importation, as the naira devaluation done by CBN has levelled the playing field.