More Crisis In Oil Industry As Marketers Suspend Importation Over Scarcity Of Foreign Exchange
Afimag.com –
There is all indications that the cost of Premium Motor Spirit, popularly called petrol, would hit between N680/litre and N720/litre in the coming weeks as dollar exchange rate is on a daily rise.
At the time of filing this report, the exchange rate per dollar is pegged between N910 and N950 at the parallel market.
Oil markers have said that people striving to import fuel are forced to suspend such plans following the scarcity of foreign exchange to import the commodity.
This was revealed slightly a week after Naira crashed further, and sells at over 945/dollar at the parallel market on August 11, 2023.
Oil dealers noted that the Central Bank of Nigeria Importers and Exporters official window for foreign exchange, that boast of a lower exchange rate of about $740/litre, had remained illiquid and unable to provide the $25m to $30m required for the importation of PMS by dealers.
This, according to them, led to the suspension petrol importation by dealers who were initially eager to import the commodity.
It was gathered that the only marketer who imported fuel recently, was now getting it hard as a result of the devaluation of the naira.
It was further gathered that PMS price hike was compulsory unless the naira would appreciate in the coming weeks.
Leaders of the Major Oil Marketers Association of Nigeria of Nigeria, Independent Petroleum Marketers Association of Nigeria, and Petroleum Products Retail Outlets Owners Association of Nigeria said there was a need for the Federal Government to intervene to address the crisis.
The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Chinedu Ukadike, explained that the price of petrol was now propelled by the changes in forex, and that Nigerians should expect a hike soon.
He said, “Once there is a slack in the naira against the dollar, there is going to be an effect. The demand and supply of forex is a key factor. We should also understand that it is not only petroleum products that use forex.
“Other manufacturers who import one thing or the other are also searching for dollars. So, the surge for dollars has continued to increase. So now that the dollar is hitting N910 to N940, and approaching N1,000, you should expect to buy PMS at the rate of N750/litre.
“It is simple mathematics, once the dollar is going up, have it in mind that the prices of petroleum products would definitely increase because the products are dollar-driven.
“Nigerians should brace for a price regime of between N680 to N720 if the exchange rate stays around N910 to N950/$, but the price is going to hit N750 once the dollar rises to N1,000.
“This is because marketers still source dollars from the parallel market, and not only marketers but virtually all importers in Nigeria. There is no subsidy any more on petroleum products, so you expect the cost to fluctuate with the dollars,” he stated.
The IPMAN PRO also stated that the Nigerian National Petroleum Company Limited was still the major importer of petrol into Nigeria, though another importer, Emadeb, imported the commodity recently.
“NNPC is still the major importer for now. One other company, Emadeb, imported products recently, but because this product is being sold in naira, getting back their funds is another issue since the naira keeps depreciating, while PMS imports is in dollars.
“This is why it is often difficult to go back and buy again as an independent importer. That is the problem we are facing,” Ukadike stated.