Petrol price increases as Marketers pay in dollars to Nigerian Agencies
Petrol price increase and the imminent fuel scarcity in some parts of the country particularly Abuja and its environs have been linked to the fact that depot owners are paying for logistics cost including shipping, Nigerian Ports Authority (NPA) charges and Nigerian Maritime Administration and Safety Agency (NIMASA) charges in United States dollars.
That has compelled marketers to sell petrol higher than the official price of N146, N147 and N148 per litre as they have sourced scarce foreign exchange from the black market to pay the government agencies, Faruk Ahmed, the new chief executive officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority told journalists on Tuesday following a meeting with President Muhammadu Buhari in Abuja.
“They have to go to black market to source for US dollars. And that differential between the official and the black market they buy is why they added about N9 to N10 to N15 and it depends on whether you are Lagos, Calabar, Port Harcourt or Ogara,” Mr Ahmed said.
“We had a meeting the week before last on Tuesday, the ninth and the NPA was there represented and the DG NIMASA was there as well NNPC, major marketers were all there and we all agreed and resolved that NNPC excess capacity of shipping their vessels will be chartered to all marketing companies will be charging in Naira so that NNPC now will go and source for converting US dollars through the CBN.”
Fuel queues returned to Nigerian cities this month, with many motorists finding it difficult to buy petroleum products as many stations were either closed or operated partially. The scarcity came amid reports of a likely price increase by marketers. The NNPC has denied the government is planning a hike.
In Abuja, many residents said they relied on the black market for petrol to power their cars and electricity generators.
In Kano, long queues resurfaced at filling stations as most filling stations were closed. Only a few filling stations sold petrol at the government approved price of N165 per litre.
In early November, the NNPC had assured there would be no hike in petrol price, going further to say there was no occasion for panic-buying.
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A statement by Garba Muhammad, group general manager, Public Affairs Division noted that more than 1.7 billion litres of petrol were in stock and a greater supply was expected for delivery in the country in the weeks and months ahead.
The head of the midstream and downstream regulatory body, Mr Ahmed, said Tuesday that there is an understanding regarding NIMASA and NPA charges that fuel marketers will contact their supervising ministry for direction on the receipt of the charges in Naira instead of dollars, adding that engagement has already begun.
The NNPC has converted to charging naira rather than dollar for excess capacity charter to all marketing companies, according to Mr Ahmed.
“I believe with this there will be no reason for the depot owners to increase their price beyond the official selling price of N148,” he said.