THE foreign exchange scarcity and recent appreciation of the price of
crude oil in the international market are threatening smooth supply of petrol
in the country, Daily Trust
has gathered.
Daily Trust gathered that for over three months now marketers have not
been importing the product into the country due to the tricky nature of the
situation.
“Right now government is not paying subsidy, even with the lower exchange
rate of 285/$1, the increase in the price of crude oil has shot the landing
cost of the refined product by about 40 percent,”, a marketer who asked for
anonymity told Daily Trust yesterday.
“When the partial deregulation was announced last year the price of Brent
crude oil was averagely at $45/ barrel but before the year ran out the crude
price jumped to $56/barrel, the situation that pushed the price per metric
tonne of the Premium Motor Spirit (PMS) to rise from $400 to about $560 by the
refiners”, the marketer said.
“Also, the gap between the current official exchange rate of N305/$1 and
that of the petroleum import rate of N285/$1 at the liberalisation period left
the marketers with the exchange rate differential of about $20 between the two
rates.”
The partial liberalisation announced by the federal government in May
2016, had technically ended the subsidy regime, but the marketers say unless
there is adjustment of price they can’t compete in the market.
With the country’s refinery operating in fits and start, Nigeria relies
largely on the importation of refined products to meet its local needs of about
30 to 35 million litres per day.
Meanwhile, the Nigerian National Petroleum Corporation (NNPC) yesterday
said it is targeting to make the country self-sufficient in product refining by
2019.
The Group Managing Director of the NNPC, Dr Mikanti Baru told the
officials of Media Trust Limited yesterday that his management have ordered for
the complete audit of the four refineries and talks are at top gear to bring in
original equipment manufacturers to the refineries for the turnaround
maintenance.
“We are pushing together various programs to ensure that we achieve at
least 60 percent local refining this year, there are changing procedures a
little bit, we are focusing on the process licensors to come and audit the
process units of our refineries and with designers of the refineries which some
of them have started coming in..” we hope if we do these systematically, geared
towards 80 percent by the end of 2018 and with other efforts from other
refineries that are coming on board we want to quit importation”.
The NNPC boss however pointed out that at the moment, the corporation is
almost the sole importer of petroleum products unlike the situation in
September 2016 when private sector companies were importing up to 50% of
Nigeria’s consumption.
Industry analysts who spoke to Daily Trust said the country is once again
sliding into what one of them called a pseudo subsidy situation with the only
difference that it is now government to government with NNPC being forced to
ask for the payment of the differential between the landing cost of refined
products especially PMS which is pegged at 145 Naira per litre.
The analysts went on to say that having been forced to nearly double the
price of fuel mid 2016, it is now politically difficult for the government to
consider another hike even when other oil rich countries like Saudi Arabia are
going in that direction.
DAILYPOST
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