Major energy marketers in the country have accused government agencies including the Nigeria Ports Authority (NPA) and Nigeria Maritime Administration and Safety Agency (NIMASA) of denominating some of their charges in dollars, a situation that has negatively impacted the supply and distribution of petroleum products in the country.
The energy marketers under the auspices of Major Energies Marketers Association of Nigeria (MEMAN), also warned that the country’s petroleum products distribution and supply chain may face more challenging complexities going by current foreign exchange market intricacies.
Executive Secretary of MEMAN, Clement Isong, at a media parley in Lagos, stated that the complexities of the forex market uncertainty have stopped members from embarking on the importation of Premium Motor Spirit (PMS), otherwise known as petrol.
Isong noted the frustration marketers face in a bid to put together a correct mathematical calculation of the product’s landing cost to further determine the appropriate pump price.
He, further, noted that though oil marketers receive products from the Nigerian National Petroleum Company Limited, NNPCL Trading, ship-to-ship (STS) products offload is transacted in dollars all of which pushes up the cost of the pump price.
“The market and consumers are not immune to government policy that allows Nigeria Ports Authority, NPA, and the Nigerian Maritime Administration and Safety Agency, NIMASA, continuous charges in dollars.
“We are presently concerned about sustainability, efficiencies, and affordability of energy for Nigerians and we are encouraging the shift to energy transition specifically into gas space,” he added.
According to Isong, though the federal government has been faithful in its avowed intervention process since it exited the petrol subsidy regime, the dollarisation policy was weakening the industry and discouraging investment.
He placed the blame mostly on fluctuating dollar movement and the unpredictability of the rate.
For instance, he said marketers pay government agencies (NPA, NIMASA, and others) about $10 per metric ton, and given the current exchange rate would translate to a higher pump price.
Analysing the forex market impact on the business, he said in 2023 when President Bola Tinubu removed the subsidy, and with the exchange rate at that time, the cost of a litre was about N4.85 and with the dollar at about N1,600 today it has added up to about N11.83 a litre, and for STS at $30 per metric ton which was N14.54 today with the dollar at N1,600 that has pushed it up to N28.44 which is adding up to the pump price.
Speaking on Transportation, lsong said even with separate negotiations by marketers, transporters charge between an average of N5 to N8 per litre or more.
He said with the unbearable rising cost, the association’s ongoing advocacy is towards leveraging gas as an alternative source of energy.
