By Daniel Edu
Petroleum product depots across Nigeria are seeing a decline in activity due to a shortage of products caused by foreign exchange rate fluctuations. The landing cost of Premium Motor Spirit (PMS), commonly known as petrol, has surged to N720 per litre, up from N651 per litre in August, according to oil marketers.
Oil dealers warn that filling stations are increasingly closing down, making it difficult to sustain the business. This situation could potentially lead to widespread fuel scarcity in the coming months.
The National President of the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), Benneth Korie, revealed that many depots are facing shortages, and their owners are struggling to secure bank loans due to high-interest rates caused by currency instability and the rising cost of the dollar. Both independent and major marketers are being severely impacted.
Korie emphasized the need for urgent government intervention to prevent the industry from collapsing, as its failure would have devastating consequences for the overall economy.
In addition, Patrick Ilo, CEO of PETROCAM Trading (Nig) Ltd., reported that the company imported 52,000 metric tonnes of petrol at a cost of N720 per litre without subsidies. He suggested that the pump price in Lagos should be around N729 per litre if the Federal Government had truly stopped subsidizing the product.
Ilo attributed the price increase to the high foreign exchange rate and stated that the Nigerian National Petroleum Company Limited (NNPC) was still subsidizing petrol. He noted that NNPC’s quiet subsidy was over N100 per litre, making the situation complex.
The current foreign exchange rate of the Central Bank of Nigeria stands at around N766/$1, while the parallel market rate is approximately N990/$1.
