Marketers of petroleum products in Nigeria have hinted that the pump price of petrol in the country could rise further to between N700 and N800 per litre, up from the current N580 N617 per litre.
The oil marketers gave the hint in Lagos at the just-concluded Oil Trading and Logistics (OTL) Africa Downstream Expo, where they expressed their frustration over the return of a regulated petrol pricing regime amid rising landing costs, and shortage of foreign exchange.
Moderating one of the panel sessions with the topic: Africa Fuels Update – Overview of Trends and Market Development, Chief Operating Officer of Pinnacle Oil and Gas Limited, Mrs. Adenike Labanjo, raised the alarm over the looming price hike when she posed a question to the Executive Vice President (Downstream) of the Nigerian National Petroleum Company Limited (NNPC), Adedapo Segun.
Labanjo stated: taking into consideration the subsidy announcement and implementation, we saw a reduction in the consumption of petrol from about 65 million litres per day to 45 million litres per day.
Now, with the widening gap between the NNPC costs and imports, which plus or minus, could land close to N700 to N800, how do we ensure that the illegal export of petrol does not come back? Because the gaps seem to be widening by the day with the various activities going on all over the world.
She argued that the rising cost of sourcing petrol had become more unbearable to the marketers than the NNPC because of the imbalance in foreign exchange accessibility that favours the national oil company more than the private marketers.
In his submission, the Executive Director of Northwest Petroleum and Gas Company Limited, Dr Mohammed Salaudeen, said the high cost of sourcing petrol had led to the shutting down of 90 per cent of petrol depots nationwide.
He lamented that the cost of buying a 10,000-metric tonne of petrol locally from the NNPC and others had surged to N7 billion, up from below half of that amount last year.
Salaudeen said the foreign exchange challenge facing the marketers had resulted in most of the players being unable to import petrol even with the approvals given by the government regulatory bodies to bring in their products. He categorically said that only less than 10 percent of marketers were able to buy petrol locally, while about five per cent were able to import and did so at a huge loss.
On his part, the Managing Director of Rainoil Logistics, Jude Nwaulune, said the cost of landing petrol in Lagos has reached about N560 565 per litre. According to him, the cost of moving the same product from Lagos towards the companys depot in Oghara, Delta State was about N570/litre while taking the product towards Calabar, Cross-River State, was around N580.
He pointed out that the challenge was basically around FX, in addition to the cost of local distribution to the pumps, amid the rising cost of diesel to power their trucks as diesel price now hovers around N1,000 per litre.
However, reacting to questions around the perceived FX imbalance and cost of doing business that favours NNPC more than other private marketers, the Executive Vice President of Downstream, NNPC Limited, Mr. Segun, boasted that the national oil company as a private integrated company has a natural edge over its competitors. He urged other marketers to rise to the competition posed to them by the NNPC because of its competitive edge over them.
In line with the Petroleum Industry Act (PIA), he said the national oil company remained a contractor to the government and was excellently positioned to be discharging its service of guaranteeing energy security for the country.
