Oil marketers says FX devaluation, high interest rate slowing down business

Oil marketers under the aegis of the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) yesterday, have expressed their dissatisfaction to the federal government over the hostile working environment its members currently operate.

In a press conference held in Abuja, Mr. Benneth Korie, the National President of NOGASA, emphasized the adverse effects of the surging dollar exchange rate on their businesses.

Furthermore, he noted that the rise in interest rates has compounded the difficulties faced by businesses operating in the oil industry

They also lamented the bad road conditions that contributed to the decline in business operations as well as the escalation in operating costs, particularly the cost of logistics.

Korie suggests that to mitigate the impact of the recent surge in oil prices while waiting for the refineries to resume operations, the federal government should consider setting the price of oil at N600 for the next three months.

Moreover, the oil marketers acknowledged their previous support for the elimination of fuel subsidies. They, however, reiterated their prior advice to take appropriate steps to mitigate its consequences on citizens and businesses, ensuring their survival.

“NOGASA is seriously worried that between now and December this year, in the absence of urgent government intervention, there will be increasing losses of lives, businesses and jobs.

“This will be accentuated by the mass shutdown of filling stations and packing up of petroleum tankers, all due to unattainable high cost of importation, lifting, transportation and distribution of petroleum products,” Korie stated.
In addition, NOGASA also expressed worries about the increasing difficulties in sourcing and distributing petroleum products.

This concern is particularly relevant due to the hardships caused by rising petrol and diesel prices nationwide.

Korie said that the price of diesel has hit N1,000 per litre, pointing out that suppliers were at the very ‘bitter’ receiving end of the precarious development.

Effect of High-Interest Rate on Marketers

Similarly, Korie observed that the rising interest rates have had a severe impact on depot owners. Consequently, numerous depots are nearly abandoned because their proprietors struggle to obtain bank loans due to the exorbitant bank rates.

“Many depots are presently dried up or out of stock, and there is no gainsaying this as it is verifiable.

“Worst hits are filling stations whose owners find it extremely difficult to secure funds to procure products for their retail outlets and both the independent and major marketers are so terribly affected that as of today, filling stations are shutting down in great numbers daily.

“Also, dealers are going out of business with many more on the verge of bankruptcy because of their inability to secure funds to facilitate orders for their stations,” Korie added.

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The president of the organization therefore proffered certain practical steps the federal government can take to mitigate against the overwhelming challenges he listed.

“We wish to once again and most sincerely reiterate that the only realistic option out of this dire situation for now is for the government to urgently consider expediting the provision of emergency palliative measures’ for marketers.

“This will be such that fuels can be imported at the rate of at least N600 per dollar for the next three months while waiting for the promised reactivation of our refineries.

“This will go a long way in cushioning the harsh effect of the high cost of importation and equally bring about reasonable reliefs to the business and cost of living generally,” he explained.