Stories by Ada Okafor
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), Mr. Adedapo Segun.
Labanjo stated: “Now given the discussions with the panelists and 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 said.
Labinjo further said: “There is a major imbalance in the FX. Now, NNPC has access to that and others don’t have. NNPC too is a business on its own, but clearly, there is a competitive edge that no one in the industry can compete with. That is very clear even from the very salient points that were made today.
“We talk about things around investments even in refineries or any other type of investment on infrastructure that can support the downstream business.
In his remarks, 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.
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