Business

Lack of licence, foreign exchange, others hinder fuel importation

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.

A report by Vanguard stated that many oil marketers that applied for licence 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 staring oil marketers in the face.

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This means the Nigerian National Petroleum Company Limited is the only entity still importing fuel into the country.

The national president, Independent Petroleum Marketers Association of Nigeria, IPMAN, Elder Chinedu Okoronkwo, could not be reached for comments, yesterday.

But in an interview with Vanguard, yesterday, the national operations controller of IPMAN, Mike Osatuyi, who noted said the oil marketers have not yet commenced the importation, said: “The cost of importing petrol has tripled because of subsidy withdrawal.

‘’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.”

Ex-depot price rises to N505 per litre

Already, he said the ex-depot price of the product has increased from over N400 per litre to N505 over the weekend, 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.

It takes time to get license —Applicant

A chief executive officer, who pleaded anonymity, said: “We have applied for license to import. We are waiting on the regulator. We also need huge foreign exchange at a competitive rate because it cost billions of naira to bring a mother vessel into the country. This has to be done in an environment of certainty.

“We cannot dabble into fuel importation at this time. Adequate caution is required from everyone, including the banks that will provide the funds, to ensure that such investment could be recovered at least with minimal profit.

‘’It is a business that one can easily get his or her fingers burnt. We are currently watching the investment landscape and will import at the right time.”

The Authority Chief Executive, Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, Farouk Ahmed, did not respond when Vanguard reached out yesterday

Meanwhile, transporters, including Uber, have increased their fares by more than 100 per cent on all routes.
For instance, it now costs over N2,000 for commuters to move from Ikorodu to Mile 2 in Lagos, a distance that used to be below N1,000.

It also cost more than N1,500 to travel from Marina to Ajah, a distant that used to be less than N1,000.

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