Private marketers seek equal stake in oil importation to retain N145 per litre price

Private oil marketers are beginning to take advantage of the ongoing fuel scarcity to press home their demand for a major role in the importation of premium motor spirit otherwise called petrol.
They have against this backdrop, seeks government intervention to access foreign exchange at a special rate for the importation of Premium Motor Spirit.
However, selling the product at N145 per litre according to them, is no longer feasible with the current exchange rate. The scarcity of foreign exchange, was a major issue that led private marketers to stop the importation of fuel last year following increase in crude prices, which they said had made it unprofitable to import petrol and sell same at N145 per litre.
This development thus left the importation of fuel dominantly in the hands of the Nigerian National Petroleum Corporation, NNPC.
The National Operations Controller, Independent Petroleum Marketers Association of Nigeria (IPMAN), Mike Osatuyi, in a report by Punch, said “The problem is that the importation ( of petrol ) is being handled almost 100 per cent by the Nigerian National Petroleum Corporation(NNPC) as private importers have backed out because the increase in crude price has made the landing cost enter subsidy .
“When the crude price hit $59 per barrel , we could not sell petrol again at N145 per litre if we were importing on our own . It is only the government ( NNPC) that is importing and can warehouse the subsidy .”
He said the government through the Central Bank of Nigeria (CBN) should have intervened by providing foreign exchange at a special rate solely for the PMS importation for both the NNPC and private importers.
“Right now , the landing cost of the PMS is N154. If you are importing at N305 to the dollar, by the time you add bank charges, it comes to N307 to the dollar. If you apply that to the current crude price , the landing cost is N154-N155. By the time you add all the margins, the pump price is about N160-N167.
“Before private importers can resume importation, the exchange rate to a dollar must be N250 and we can sell at the price of N145 per litre,” Osatuyi said,.
Speaking on the Forex challenge, the Executive Secretary , Major Oil Marketers Association of Nigeria , Obafemi Olawore, also said he was told that some people have special rates . 
“If they do, fine, let them give to us also. We will prefer a situation where we have access to forex and we can import.”
The Director General , LCCI , Muda Yusuf, also told Punch in a telephone interview that: “It’s unfortunate that fuel queues have returned . But there is a very fundamental problem with our petroleum downstream sector, and the problem is that it is over-regulated . You cannot have a sector as big as that serving our size of population and we expect only the government provider to be supplying fuel. It is not a sustainable model .
“So, there is an urgent need to push back the role of government in the issue of retailing fuel, importing fuel and all of that. Right now, it is only the NNPC that is importing the PMS . Such a thing cannot be efficient; it creates room for all manner of abuses; some of which the marketers cannot disclose because of their own businesses.”
He said the private sector should be allowed to play a bigger role in importation, refining, distribution, marketing and other activities in the downstream sector.

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