Lack of License, Foreign Exchange, Others, Hinder Fuel Importation after Deregulation

Barely a month after deregulation, operators in the downstream sector have not been able to import petrol into Nigeria, due mainly to a lack of license and foreign exchange.

Recent investigations indicated that many Oil marketers that applied for license, are still waiting for the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, to release it. It also showed that the six companies, including Eterna, which got the license have not started importing the product into the country.

The checks further indicated that despite the floatation of foreign exchange rates by the Central Bank of Nigeria, CBN, many Oil companies, still find it difficult to go into business.

A visit to many private depots in Apapa, Lagos, showed that the Oil marketers are not contemplating importation in the coming weeks because of uncertainties currently obvious in Oil marketing business. This means that the Nigerian National Petroleum Company Limited (NNPCL), is the only entity still importing fuel into the country.

In an interview with Vanguard Newspaper on Sunday June 25, the national operations controller of IPMAN, Mike Osatuyi, said the “Oil marketers have not yet commenced importation since the cost of importing petrol has tripled because of subsidy withdrawal.

He said ‘’we now need more funds to put into the business than before. Remember the exchange rate of the naira has also increased from over N400/ a dollar to over N700/per a dollar. This means that a lot of funds are needed than before. It is not easy for a single company to bring out that level of money. So, we are discussing with the banks.

‘’It will take some time to conclude the various discussions before securing funds for the importation. The price of petrol may be high at the initial period, but it would drop later as many Oil marketers begin to import the product.”

Already, he said the ex-depot price of the product has increased from over N400 per litre to N505, thus forcing the independent marketers that lift the product from private depots, to sell at different prices, ranging from N510 -N530, depending on location, to recover cost.

Meanwhile, Transporters, including Uber, have increased their fares by more than 100 per cent on all routes.