April 21, 2024

Rainoil says average petrol landing cost now N571/litre, blames  FX crisis, distribution hiccups for price hike 

Jude Nwaulune, Managing Director of Rainoil Logistics at #OTL

 

Oredla Adeola

 

Rainoil Logistics, one of the petroleum products marketing companies in Nigeria has estimated the landing cost of Premium Motor Spirit(petrol) to around N565 per litre in Lagos, N570/l towards Oghara, Delta State, and N580/l the Calabar, Cross River State.

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Jude Nwaulune, Managing Director of Rainoil Logistics, made this known while speaking on a panel session at the ongoing Oil Trading and Logistics (OTL) Africa Week 2023 in Lagos with the theme,’ Africa Fuels update -overview of trends and market development’.

 

According to him, the landing cost of the product according to the company’s current estimation is around N565 in Lagos, N570 towards Oghara end, and N580 towards the Calabar end.

 

He alluded that the ongoing foreign exchange crisis (FX) and difficulties in the local distribution channel are major factors pushing up the cost.

 

Nwaulune said, “The realities have been alluded to here from the FX point of view, basically sourcing from the parallel market, which most marketers are forced to.

 

 

“Taking a look at our operational bases, landing PMS in Lagos is around N565. We take it towards Oghara end, it’s about N570 and towards the Calabar end, it’s equally within the N580 range.”

 

 

Rainoil’s boss said that independent marketers are having difficulties breaking even in their operations since the removal of fuel subsidy and the emergence of the foreign exchange crisis.

 

 

“You find a situation where it’s unaffordable (to land petrol and distribute it to the pump). In this chain, the independents are beginning to miss from the chain.

 

“So, it’s a huge cost taking it from the depot end to the pump is a whole lot of challenge.”

 

“Most independents can’t afford the product, at the moment there seems to be a big scarcity and along the chain also, you will see that the cost of transportation has increased, diesel is about one thousand naira per liter.

The Managing Director of Rainoil Logistics in his comment on energy transition called on stakeholders to make more investment in CNG and other cleaner fuel as the country has adopted Gas.

 

He therefore urged the government to ensure the enormous challenges confronting the country such as insecurity, asset vandalisation and community unrest is well handled, although the Petroleum Industry Bill (PIA) is addressing it.

 

He further charged the government to ensure that Nigeria is seen as an investment destination with sanctity of contract, virile fiscal and commercial framework to unlock its gas industry.

 

“We have to unlock the supply side and create sustainable supply and demand that make the gas sector work,” Nwaulune said.

 

The Managing Director of Rainoil Logistics has therefore called on the government to remove all local transactions that are being priced in US dollars.

 

He emphasised that the removal would help the industry grow, looking at the current economic indices of the country.