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Business News of Tuesday, 17 October 2023


Oil marketers move to end NNPC monopoly, set to resume petrol import as landing cost hits N720/litre

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There are indications that the Nigerian National Petroleum Company Limited (NNPC) will soon cease to be Nigeria's sole importer of petroleum products.

The development comes as oil marketers are said to resume importation of petrol as the Nigerian Government moves to end NNPC petrol import dominance.

The move follows a meeting between the Depots and Petroleum Marketers Association of Nigeria (DAPPMAN) and Major Marketers Association of Nigeria (MOMAN) with top officials of the Nigerian Midstream and Downstream Petroleum Products Regulatory Agency (NMDPRA) this week.

According to the Group Chief Executive Officer of NNPC, Mele Kyari, the inability of oil marketers to import fuel due to lack of access to Forex has led to the company becoming the sole importer of the product again in Nigeria.

At the current exchange rate of N1,000 per dollar and the price of crude oil in the international market above $90 per barrel, the landing cost of petrol has increased to about N720 per litre.

Feelers show that the Nigerian Government is working on a raft of short-term measures to allow oil marketers access to foreign exchange at a rate that will not distort the current price of the commodity.

Checks show that the Nigerian Government is working on some fiscal measures as a long-term action to strengthen the naira.

On Thursday, October 12, 2023, the Central Bank of Nigeria (CBN) lifted the restriction on 43 items from accessing Forex at the official market.

Analysts believe that the restriction has been responsible for the fall of the naira as importers flood the parallel market in search of Forex, leading to the crash of the local currency.

Per the meeting between the marketers and NMDPRA, a multilateral approach is being worked out to enable marketers to access Forex at an affordable rate.

In contrast, measures are being worked out to strengthen the naira. Oil markers have consistently called on the Federal Government to provide a fair field and give oil marketers access to foreign exchange at the official CBN window to ensure hassle-free transactions and create opportunities for them.

Daily Trust reports that DAPPMAN Chairman Winifred Akpani lamented the absence of a level playing field in the Forex market, which hinders marketers from getting Forex at affordable rates.

She said the absence of affordable Forex had stalled most marketers’ operations and eroded their capital expenses, primarily USD.

“Getting access to foreign exchange at the official CBN window and paying for levies and fees in our local currency will markedly transform service levels and spur product availability to a new height across the nation,” she said.

"NNPC Depots are dry": Marketers speak on slight increase in petrol price adjustments reported that the IPMAN revealed on Wednesday, October 9, 2023, that oil marketers could not lift products from the Nigerian National Petroleum Limited (NNPC), leading to scarcity in parts of the country.

The association said that despite NNPC not increasing its prices, marketers no longer have access to the oil company’s portal as it has stopped letting them load via the portal.

Speaking in Abuja, IPMAN's national spokesperson, Chinedu Ukadike, said private depots with products are already exploiting the situation and increasing their prices due to their inability to get products.