Says move worsening price volatility, weakening naira
Emmanuel Addeh in Abuja
The Independent Petroleum Marketers Association of Nigeria (IPMAN) yesterday rejected the recent approval of additional import licences for petroleum products, stressing that apart from worsening price volatility, it was putting unnecessary pressure and weakening the naira.
In a reaction to the recent spate of issuance of permits, the National Publicity Secretary of IPMAN, Chinedu Ukadike, urged the federal government to look into the matter transparently through the regulator, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
He stressed that the import licences, which were meant to serve as a check on domestically refined petroleum products, were not achieving the results expected by independent marketers, lamenting that some of the companies granted import licences were pegging their prices at around N1,350 per litre.
While questioning the rationale behind the licences, IPMAN explained that this figure is far higher than what the Dangote refinery sells to marketers, noting that if the goal of the NMDPRA and the federal government is to checkmate the domestic price of products, then the purpose has been defeated.
Ukadike added that the price volatility was deepening and directly affecting independent marketers, and explained that landing costs for imported petroleum products were about 20 per cent higher than what Dangote refinery charges.
In his view, it makes the import arrangement counterproductive, arguing that importing fuel at a higher cost than what is locally available puts unnecessary pressure on Nigeria’s foreign exchange reserves and the naira.
Ukadike linked this pressure to the recent rise of the dollar to about N1,400, which he said was, in turn, affecting the pump price of petroleum products across the country.
He called on the federal government to sit down with the presidential committee on the downstream sector to look into the challenges facing Dangote Refinery and to ensure the refinery continues to receive support to produce enough petroleum products for the country, in naira.
According to him, one major gain Nigeria has recorded from local refining is a continuous and uninterrupted supply of petroleum products, something the country struggled with in the past when it depended heavily on imports.
“If we are having continuous and uninterrupted supply, our problem is pricing. Is it not better we sit down and see how this issue can be controlled, than signing unnecessary import licences that will further inflate the price of petroleum products in our country?” he asked.
Ukadike called for stronger support for local refining capacity, including government-owned refineries, alongside Dangote Refinery, describing this as necessary for the country’s energy security. He said Nigeria should prioritise its own refining capacity rather than depending on imports.
“Nigerians are suffering. This is a time to call for national unity, a time to call for one Nigeria, a time to call for support for our industrialists and our refiners,” he said.
He added that Nigeria could also explore the export of finished petroleum products as an additional source of foreign exchange, once local supply is sufficient for domestic consumption.
He recalled the difficulties of the era when Nigeria depended solely on imported petroleum products, noting that the country sometimes experienced fuel scarcity for two to three weeks at a stretch. He said that since local refining by Dangote began, such scarcity has become a thing of the past.
Ukadike, therefore urged the federal government to look inward and support the domestic refining of petroleum products, in order to guarantee energy security, sufficient local supply, and additional foreign exchange earnings.
