Oil marketers adamant over importation of petrol, want clarification on market fundamentals
Nigeria’s oil marketers have shun importation of Premium Motor Spirit (PMS) or petrol despite recent steps by the government to make the price of the product flexible.
The government recently put price modulations mechanism in place so that petrol price would follow the dynamism in the price of crude oil. With the mechanism in place, if the price of crude goes up it would reflect in the price of petrol and verse visa.
But some oil marketers told Businessday that the situation was not about price modulations only but that there should be clarifications on the market fundamentals without which there cannot be import of petrol by them.
Such fundamentals include the source of forex to buy the product and at what rate would the forex be sold to them, and what would be the margin given to them.
Others are Nigeria Port Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA) charges, platts rates and the premium, which is the cost of freight plus the profit margin of the importer.
The chairman of Major Oil Marketers Association of Nigeria (MOMAN), Tunji Oyebanji, said his members were thinking of importing provided the forex window is favourable.
He said the landing cost might even be lower in the nearest future, as the price of crude oil might go below $20 as being speculated in some quarters.
Meanwhile, the refusal of the Nigerian National Petroleum Corporation (NNPC) to agree to pay for the products in the trucks that were yet to get to their destinations before the government crashed the price of petrol to N125 per litre from N145 is unsettling the downstream subsector of the oil and gas industry.
Many of the trucks had loaded from Lagos and headed to different parts of the country to discharge when they were cut up with the new policy pronouncement.
The fact that NNPC decides to recognise the fuel in the storage tanks and vessels and not the ones in the trucks does not provide the necessary succour to the dealers and marketers, as they fear the consequences of losing several million of naira through no fault of theirs.
Investigations reveal that NNPC is of the view that the fuel in the storage tanks and vessels could be monitored but the once in the trucks cannot.
On account of this development, all the fuel bridging undertaking by major oil markers and members of Independent Marketers Association of Nigeria (IPMAN) are not going to be paid for. There are 300 trucks with an average of 40,000 litres parked around Abuja, which could not be discharged because they were purchased based on the old price of N145 per litre, but the marketers are not ready to discharge them by losing N20 per litre.