In a groundbreaking development, major oil marketers are poised to resume petrol imports in Nigeria, signaling the end of the Nigerian National Petroleum Company Limited (NNPC) monopoly on petroleum product imports. This significant shift follows a crucial meeting between the Depots and Petroleum Marketers Association of Nigeria (DAPPMAN) and the Major Marketers Association of Nigeria (MOMAN) with high-ranking officials of the Nigerian Midstream and Downstream Petroleum Products Regulatory Agency (NMDPRA).
According to Mr. Mele Kyari, the Group Chief Executive Officer of NNPC, the sole importation of fuel by NNPC has been largely attributed to oil marketers’ inability to access foreign exchange (Forex). The exchange rate of N1,000 per dollar and soaring international crude oil prices, currently above $90 per barrel, have led to a significant increase in the landing cost of petrol, bringing it to a staggering N720 per litre.
In response to this growing challenge, the Nigerian Government is working on implementing a range of short-term measures to enable oil marketers to access Forex at a rate that will not disrupt the current petrol prices for consumers.
Furthermore, the government is actively exploring long-term fiscal measures to bolster the Nigerian currency, the naira. Notably, on October 12, 2023, the Central Bank of Nigeria (CBN) lifted restrictions on 43 items from accessing Forex at the official market, a move that is anticipated to have a positive impact on the stability of the naira, which has been affected by importers resorting to the parallel market in search of Forex.
In a bid to facilitate the access to Forex by oil marketers, a multilateral approach is being devised, and work is underway to ensure they can secure Forex at an affordable rate. The Nigerian government is keen to provide a level playing field and create opportunities for oil marketers by granting them access to foreign exchange through the official CBN window, which is expected to streamline transactions and boost product availability across the country.
Notably, DAPPMAN Chairman Winifred Akpani has raised concerns about the lack of a level playing field in the Forex market, which has hindered marketers from obtaining Forex at reasonable rates. This has significantly impeded their operations and eroded their capital, primarily in USD.
The impending shift in the dynamics of petrol imports, as oil marketers gear up to play a more prominent role, could have far-reaching implications for the petroleum industry in Nigeria. While the challenges are substantial, the government’s efforts to provide access to Forex and strengthen the naira offer a ray of hope for a more balanced and competitive market, potentially alleviating the burden on consumers and providing greater stability in petrol prices.
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