Scarcity of Premium Motor Spirit(petrol) looms in Nigeria as licensed petroleum product marketers face challenges due to foreign exchange volatility preventing them from closing business deals with suppliers and banks, as other oil importers put their importation plans on hold due to seeming preferential treatment and tough business environment.
The Independent Petroleum Marketers Association of Nigeria (IPMAN), Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), and Major Oil Marketers Association of Nigeria (MOMAN) are set to meet on Tuesday to discuss the issue.
This was revealed by some marketers during a chat with EnergyDay on Monday, revealing that A Y M Shafa Oil Company, A.A Rano, and Emadeb (the three oil marketers licensed to import petrol into Nigeria) could not close the transactions of the petroleum product that they imported since June due to the foreign exchange differential rate.
One of the marketers in a chat with EnergyDay on the sideline of the crisis confirmed that the product suppliers are requesting the payment in dollars at the prevailing rate of N800 plus, while the commercial banks are also requesting that the remittance should be made at the rate equivalent to the prevailing forex rate.
He revealed that the current situation is leading to an artificial scarcity of the product because marketers are unwilling to sell their products at the present price, which they see as unrealistic. This according to him has resulted in the hoarding of products by some marketers.
He also emphasised that no marketer is willing to sell at the current price until the price is right for them. He therefore hinted at the possibility of another round of nationwide petrol scarcity, which could lead to an upward review of the pump price to above N750 and N800 per litre.
He said, “Nigerian National Petroleum Company (NNPC) Limited retail, is cushioning the market, as the former sole importer. The national oil company is importing and not releasing only a fraction of the volume to private companies, unlike before when it used to do so.
“NNPC stores some of its products it imported in private terminals, including Pinnacle Oil terminal in Lagos. The product is discharged from vessels to the Pinnacle terminal and sold in batches to the marketers, with the trucking out process being monitored.
“Additionally, NNPC has been loading products from these terminals to all its filling stations. The national oil company retail outlets spread across the country have sustained the downstream on the back of their spread across the country,” he said.
According to him, the NNPCL is likely to run out of old and current stocks in the next few weeks, leading to another fuel scarcity. He noted that the independent markets in the country cannot withstand the fore volatility, exacerbating the situation.
To address the issue of fuel scarcity, the marketer, therefore, recommends a complete overhaul of the downstream sector with a focus on transparency, accountability, and openness.
Additionally, he urged President Bola Tinubu to expedite efforts to revamp the local refineries, which would help ease the pressure on forex. He also emphasised that the lack of refining capacity in the country forces Nigeria to export its crude oil and import refined petroleum products for daily use.
Joseph Ehimen, Chairman of the Lagos Chapter of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), has expressed concerns about the state of the petroleum industry downstream sector, revealing that despite the removal of the petrol subsidy, the sector has returned to a monopolistic market, lacking the right business environment and incentives for operators to freely operate in a fully deregulated market.
The PETROAN Chairman, therefore, called on the government to prioritize tackling corruption and creating a favorable business environment. He emphasised that the crisis in the downstream sector will escalate without addressing these issues.