More marketers approach banks for loans to import fuel

petrol pump

More marketers approach banks for loans to import fuel

Banks are set to increase funding of petrol importation to the N3.5 trillion as more marketers move to import the product amidst push for exclusivity of local production and supply led by Dangote Refinery.

Financial Vanguard learnt that banks are now receiving more loan requests for funding petroleum products imports with the head of oil and gas in a tier-1 bank saying about N250 billion single request came to his desk last week, the third in the last one month.

He estimated the banking industry funding of petrol imports to be around N3.5 trillion before end of this year.

He stated: “We have started seeing a lot of petroleum marketers coming up with loan requests for importation of products, which we didn’t have before now not even when the President declared that subsidy is gone.

“We have also done our due diligence on the market and discovered that deregulation is gaining traction across the private and public sectors.

“Before now we do not entertain lending to petrol marketers due to issues around pump price regulations because many banks had burnt their fingers in the recent years over oil and gas related loans that failed.”

Petrol costlier than actual market price, NLC alleges

Meanwhile the Nigeria Labour Congress, NLC, has alleged that the pump price of petrol is higher than market price, accusing marketers of ripping off Nigerians.

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NLC in a communiqué at the of its National Executive Council, NEC, in Port Harcourt Rivers State, by its President, Joe Ajaero, noted with “increasing dismay the shenanigans around the appropriate pricing of petrol, (Premium Motor Spirit, PMS) in Nigeria.”

NLC observed that there may be a gangup against Nigerians by fat cats in the industry as the current price of the product is significantly higher than the real market price. Padding of costs and abnormal margins seems to be the order of the day considering the revelations from the ongoing controversy between Marketers and Dangote group. It is entirely possible that Nigerian workers and masses are being ripped off by those who control the levers of Economic power in Nigeria which explains why the domestic public refineries may not immediately be allowed to come on stream.

“How can one explain the situation where marketers are still eager to import petrol with all the taxes such are import charges, fright charges, Nigerian Port Authority, NPA, Nigerian Nigerian Maritime Administration and Safety Agency, NIMASA, among others, despite a local source of refined petroleum products speaks volume.

“NLC demands appropriate pricing of petrol and calls for the Public domestic refineries in PH, Warri and Kaduna to quickly come back on stream to break-up the monopolistic stranglehold the big players have on the industry.”

At $72 per barrel of oil, imported petrol should be cheaper in Nigeria — Experts

Supporting NLC’s position, experts and other stakeholders, weekend, said at the current price of $72 per barrel of crude oil, the price of Premium Motor Spirit, PMS, also known as petrol, should be cheaper in Nigeria.

They said the current price of N1, 025 per litre (Lagos) was taken when crude oil, a major feedstock stood at more than $80 per barrel in the global market September 2024.

Since then, they said the price of crude has been volatile before dropping to the current $72 per barrel, without reflecting in the domestic price of petrol.

In different interviews with Vanguard, the experts noted that deregulation as currently practiced should enable the market to respond seamlessly to changes, including crude oil, the major raw material.

On his part, a Port Harcourt-based energy analyst, Dr. Bala Zakki, said: “The irresponsible petroleum products price dynamics in Nigeria is never obtainable in any Organisation of Petroleum Exporting Countries, OPEC member nations and the reason is very simple and straightforward.

“OPEC member nations have their functional state-owned refineries. No responsible government will or should abdicate its responsibilities of providing goods & service to the private sector.

“Globally, private sector operators are known to be shylocks, exploitative and profit maximizers.”