Emadeb Energy Service Ltd., one of the first three depot owners and marketers licensed to import fuel by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), has taken delivery of 27 million litres at its depot, having incurred a cost of over 17 million dollars due to foreign exchange rates at the international market.
Mr Debo Olujimi, Emadeb Energy Service, Chief Executive Officer, disclosed this during the inauguration of the first petrol cargo by Emedab Energy inaugural ceremony at its Ijegun Satellite Depot in Lagos.
According to him, Emadeb is one of the first marketers to import petrol after subsidy removal by President Bola Tinubu on May 29. He added that this will boost product distribution in the country.
Olujimi noted that the 27 million litre cargo cost over 17 million dollars due to the foreign exchange rate at the international market.
He said, “27 million litres of petrol was imported to support what the Nigerian National Petroleum Company Ltd. (NNPCL) had been importing in the last eight years, as sole importer.
“Now that private companies have been granted licences to import petrol, this is actually the way forward.
“It is a known fact that the increase in the price of petrol has been a huge pressure on Nigerians which we all understand.
“The only way to address the ongoing challenges is for the government to encourage local refining,” he said.
Olujimi however noted that establishing refineries in Nigeria is the only way to eliminate foreign exchange which has been determining the price of petrol.
“As of yesterday, the US dollar was at N834. The Nigerian Government should therefore assist marketers to access dollars on a single CBN E&l window pending when local refineries will be able to work.
“This will be sustainable so that all marketing companies can pledge on how to import petrol into the country,” he added.
The Emadeb boss commended President Tinubu for deregulating the downstream sector, adding that the company looks forward to sustainable development in the oil and gas sector.
” We decided to import to cushion supply, to limit NNPCL’s monopoly of the donwstream sector.
“We are a responsible company and we know what Nigerians are passing through. So, we will not inflate the price or engage in profiteering of the product because we are God-fearing people.
“We urge the government to help to find a window where forex is resolved to have a fixed market rate for importation of fuel,” he said.
Mr Ahmed Farouk, the Authority Chief Executive, Nigeria Midstream and Downstream Petroleum Regulatory (NMDPRA), commended Emadeb’s bold step toward importing petrol despite the fluctuation in foreign exchange rate.
Farouk, who was represented by Mr Sadiq Bashir, Executive Director, Corporation Services and Administration of NMDPRA, said the company had made significant progress geared toward effective product distribution.
He said that deregulation was not about pricing but opening of the market.
“NMDPRA will also ensure quality supply of petrol and quality in product. Prices change and market forces also determine the market. Petroleum price is denominated in dollars and the product is bought in foreign exchange. The price is benchmarked with the international price,” he said.
Mr Olawale Afolabi, the Secretary General of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), said that deregulation had helped in opening the market.
Afolabi said that the significance was that Emadeb had taken the bull by the horn to bring in the product against NNPCL, who used to be the sole importer.
He said the most important part was that deregulation should be based on local production.
“The huge price increase in petrol is affecting Nigerians, the international market cannot be determined by the government.
He urged investors to come and invest in refining, so that Nigeria can have local refineries.
Mr. Mike Osatuyi, the Operations Controller of the Independent Petroleum Marketers Association of Nigeria (IPMAN), commended Emadeb for commencing importation under the post-subsidy removal regime.
. The era of monopoly of product has gone. The process will be more transparent than that of the NNPCL, where money is paid and products are not allocated for five months.
“I urge the government to quicken the palliative for Nigerians, to have a relief. Government should use the money saved from subsidy and forex to do something reasonable for Nigerians.
“Price will be competitive because the cheapest rate as of yesterday was N565,” he added.
Mr Gabriel Ogbechie, Managing Director, Rainoil Ltd., lauded Emadeb for importing products after the subsidy removal,
He said that the company had set the pace in the importation process, adding that deregulation is workable and the way to go.
“There are so many challenges in the downstream sector including forex instability, which moved to N835 to dollar.
“There are huge fluctuations in the system but deregulation is the best way to go.
“The process will be competitive under deregulation if the prices drop, petrol will also be dropped,” he said.
The marketer said that the floating exchange rate was the right thing to do because the huge disparities between the official rate and black market rates were not sustainable.
He, therefore, urged the government to provide liquidity to the market to ease importation.
“If the government does not provide liquidity, this fluctuation will continue,” he added.