Oil market participants are increasingly concerned that the country will not be able to import gasoline due to a shortage of dollars. Despite downstream deregulation, concerns have been raised about the possibility of a return to the country’s lingering fuel shortages. Ope Oluwani Akitayo write
Expectations were high when oil market players campaigned for an end to fuel subsidies and deregulation of the downstream sector. Many were optimistic that downstream deregulation would break the Nigerian National Oil Company’s monopoly on gasoline imports and end the country’s persistent oil shortages.
However, months after President Bola Tinubu announced the end of fuel subsidies on May 29, the country has not been able to end NNPCL’s monopoly on petrol imports.
Independent oil marketers have not been able to import a single drop of petrol since Emadeb Energy imported the first 27 million liters of petrol in July. The state oil company remains the sole importer of gasoline.
Monopoly in the downstream sector disrupts deregulation of the sector, empowers NNPCL to continue fixing prices, and puts the country at risk of fuel shortages.
The Nigeria Midstream and Downstream Petroleum Regulatory Authority and the NNPCL had maintained that petrol was given to the sellers who applied for import licenses, so other sellers were also free to import petrol.
Mike Osatui, National Administrative Affairs Officer of the Independent Petroleum Marketers Association of Nigeria, said: punch Market players said they were not importing gasoline due to foreign exchange shortages and rising oil prices in the international market.
“Marketers are not importing because of price. However, pro forma invoices still exist and marketers are still getting a lot of money from NNPCL because NNPCL is the only company that is importing. ,” he said.
On Thursday, crude oil prices rose to $94.95 per barrel with $1 being exchanged for N770 at the Investors and Exporters foreign exchange counter and $1 being exchanged for $985 at the alternative market.
Emadebu Energy CEO Adebowale Olujimi said when the product ship arrived in June that petrol imports were not “sustainable”.
“Importing petrol is not a sustainable way to run a country. What we saw when PMS prices rose to over 600 Naira per litre, shows the tough business dynamics. “We need huge amounts of US dollars to implement this. The way forward is to revive local refineries,” he said.
An official from the Nigeria Major Petroleum Marketers Association told our correspondent that the market has been deregulated to allow other independent distributors to bring in their products. He explained that this should create healthy competition and ultimately drive down prices. That dream has now become a “mirage” as marketers no longer have access to foreign exchange, he said.
“NNPCL has reduced imports. And the whole idea was that individuals would also import petrol to increase what NNPCL brings. But marketers are not importing. So still NNPCL remains the sole importer,” he added.
NNPCL spokesperson Gulbadeen Muhammad told our correspondent in June that the company would reduce its fuel import program in August when the Dangote refinery becomes operational.
NNPCL owns 20% stake in Dangote Refinery.
NMDPRA CEO Farooq Ahmed told reporters after a meeting with oil market players in Abuja in June that NNPCL had cut imports, corroborating Mr. Mohammed. Stated.
Since the end of the subsidy, which cost about N12 trillion, petrol prices have increased from between N180 and N200 per liter to between N614 and N700 per liter. There were fears that the price could go up to 720 Naira per liter due to exchange rate appreciation and higher crude oil prices in the international market, but NNPCL has since allayed those fears.
“No one wants to run at a loss. So, we are all waiting to see what happens. Currency is an issue as the Naira continues to depreciate against the dollar. There is no bank that is willing to stick its neck out to provide it.Currently, warehouses are running out of stock and we may soon have to rely on NNPCL for supplies,” another official said. . punch on Thursday.
The dispute over product supply was further muddied when IPMAN Mosinmi Depot recently threatened to file a lawsuit against NNPCL for not supplying products to its members eight months after payment.
A statement from the IPMAN Mosinmi warehouse said each member paid N25 million for each 45,000 liter petrol truck, which was not supplied.
This was revealed by a person close to the situation. punch Up to 4,000 marketers were reportedly affected.
NNPCL spokesperson Garba Mohammad did not respond to inquiries regarding the allegations.
However, NNPCL officials begged not to speak on the issue as they were not authorized to speak on it, saying NNPCL was not the sole importer of petrol and therefore should not be blamed for petrol-related issues. .
“Why is everyone blaming NNPC for the fuel shortage? The sector is now deregulated, so NNPC is no longer the only importer. Other marketers have also been granted licenses. So they have to be imported. Why are they still dependent on NNPCL for their products?” the source asked.
The country has experienced two fuel shortages since the government announced downstream deregulation and oil removal subsidies.
IPMAN Satellite Depot Chairman Akin Akinrinade said one of the incidents was due to lack of stock.
“No one has told us anything yet. And as we speak, we still haven’t loaded any product here. In fact, the situation is getting even worse as the lines continue. Even some of the NNPCL Retail stations have no products for sale. I think this is a stock issue, but NMDPRA should tell us what is really going on. I hope they tell the truth. “I know you don’t want to,” he said.
However, the President of the Nigerian Petroleum and Natural Gas Senior Officials Association, Festus Osifo, has debunked NNPCL’s claim of low petroleum stocks.
“I guarantee you that there is enough product in this country,” he declared.
The IPMAN National Operations Director also said there was no need for alarm.
“NNPCL has assured us that there is no need to worry. So let’s take their word for it,” he said.
An official at the Nigeria Midstream and Downstream Petroleum Regulatory Authority spoke on condition of anonymity. punch This means that there was more than enough inventory in Japan.
He said as of early September, a total of 200,000 tonnes (equivalent to 450 million liters) was stored in onshore tanks in various warehouses in Lagos.
Dangote refinery misses production deadline
Unable to import gasoline, market players are now filling up the 650,000 barrels per day refinery in Dangote, which was scheduled to start operations in October.
The plant was originally scheduled to begin operations in August, but the target was not reached.
Speaking at the refinery’s inauguration ceremony by former President Muhammadu Buhari in May, Dangote Group President Aliko Dangote said the ceremony marked “the beginning of a great journey and a new and exciting trajectory for Nigeria’s downstream petroleum sector.” It’s a milestone.” and the gas industry.
“It is our firm resolve to replicate in this sector what we have achieved in the cement and fertilizer markets where Nigeria has moved from being the largest importer of these products to a net exporter.
“Your Excellencies, Distinguished Guests, Our first products will be on the market by the end of July or early August this year,” Dangote said.
However, the survey results revealed that facility managers are uncertain about when the refinery will begin production.
A Dangote refinery official spoke on condition of anonymity. punch that there have been numerous negative reports regarding this refinery since it was launched;
“Some said it would be in 2025. There were even reports that petrol import permits had been issued to the refinery as a cover-up for the commissioning that took place in May. Management responded to the newspaper that wrote the report. The reporter would be the first to be sued.
“As of now, management has not announced an official date.
“But I wonder why people are so interested in someone else’s business. It’s a private refinery, not government-owned, and management is eager to start producing. Billions of dollars are being poured into it. and they are also trying to profit from it,” the source said.
The official said no one is keen to investigate why the NNPCL refinery has not started refining yet despite billions of dollars being allocated for upgrading it.
Sources wondered why everyone was busy investigating private refineries.
Another source told Punch that imports of some equipment needed for the Dangote refinery have been held up due to fluctuations in the country’s foreign exchange market.
The $20 billion project was conceived in 2013 and was scheduled to be completed by 2016, but construction did not begin until 2017.
expert advice
The Pengassan president advised the federal government to focus on completing the Port Harcourt refinery instead of waiting for the construction of the Dangote refinery.
“Rather, the focus should be on getting other refineries up and running as the freight charges from imports will be reduced and prices will go down.” We can decide tomorrow that we will never refine oil again. Instead, we should go ahead with our own refinery and ask the government when the Port Harcourt refinery will start refining gasoline.” he said.
IPMAN’s Osatui said there was no need to be alarmed as far as petrol supply was concerned as NNPCL was still importing.
He said the Dangote Refinery management may have delayed production at the facility due to internal issues.
“There is no need to worry as Dangote Refinery is a private company and there could be one or two issues that prevented the refinery from starting production. “It’s better to have them and start production at the right time. Let’s be patient with them,” he said.
He also advised the Federal Government to ensure that other local refineries are operational instead of relying on the Dangote refinery.
