CBN May Resume Forex Allocation to Marketers for PMS Import

The Central Bank of Nigeria (CBN) may resume allocation of foreign exchange (forex) to oil marketers in Nigeria for importation of petroleum motor spirit (PMS) into the country and consequently relieve the Nigerian National Petroleum Corporation (NNPC) a bit from the sole importer duty it took up to sustain products supply in the country, THISDAY has learnt.

The CBN decision, THISDAY gathered was informed by the oil marketers’ recent indication that they were ready to resume importation of PMS, otherwise called petrol, when they met with the NNPC last week in Abuja.

During the meeting which also had the Petroleum Equalisation Fund (PEF) and Petroleum Products Pricing Regulatory Agency (PPPRA) in attendance, the three major oil marketers associations - Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association (DAPMA), and Independent Petroleum Marketers Association of Nigeria (IPMAN), expressed their willingness to resume importation of petroleum products, especially petrol.

They, however, said access to foreign exchange at affordable rates to enable them import the commodity was an impediment to this and wanted the corporation to intervene.

Also, because of the forex instability, the marketers stated that they have been unable to import products, thus leaving the job to NNPC, which as at December 2016 said it was doing up to 97 per cent of the entire products importation into the country.

Following from the meeting with the marketers, THISDAY, however, learnt from a highly placed NNPC source that the CBN could resume forex allocation to the marketers to enable them restart importation.

The source, who spoke on condition of anonymity, stated that the forex allocation may, however, favour only marketers with established downstream presence and not necessar- ily every other oil marketers without real downstream infrastructure.

He said the decision could be to protect the government from unforeseen future claims from marketers, who may import products and incur extra costs in distributing to consumers within the approved N145 per litre pump price band.

“We had a meeting three days ago with the Central Bank to look at the forex request from the marketers. CBN will, of course, approve forex for importation and at times like this, it is going to be more of the people who have presence in every aspect of the value chain that are more likely to import and still make money at N145 per litre,” said the source.

However, CBN denied having any such meeting where the issue of forex allocation to fuel marketers was discussed. According to the Acting Director, Corporate Communications, Mr. Isaac Okorafor, said, “The story is untrue. CBN wasn’t at such meeting.”

The source further stated: “The issue with importation is the international cargo prices for importing PMS, which is linked to the price of crude oil, and so as the price of crude increases, it impacts the final cost of PMS to buyers.

“Crude has, however, been on a decline and it created a lot of opportunity for downstream operators. If crude remains at the current level, we will see more people wanting to import gasoline. Also, by the end of March, and sometimes in April, we will go into summer and refineries will start producing more petrol for people, who will travel a lot and hopefully, when that happens, we will see more people import and can even sell below N145 and still make money.”

The source also spoke on NNPC’s current responsibility as the sole importer of petrol in the country, saying: “Currently we are doing everything; there is little or nothing coming in from anybody for petrol. Once in a while MRS and a few others companies bring in something into the country but largely it is NNPC that is doing everything now.”