Oil marketers, on Sunday, indicated that the cost of Premium Motor Spirit, popularly called petrol, would rise to between N680/litre and N720/litre in the coming weeks should the dollar continue to trade from N910 to N950 at the parallel market.

They also hinted that dealers seeking to import PMS were being forced to put the plans on hold due to the scarcity of foreign exchange to import the commodity.

The warning came barely one week after the local currency crossed the N900/dollar ceiling, with the naira selling at over 945/dollar at the parallel market on Friday.

Oil dealers said the CBN Importers and Exporters official window for foreign exchange, which boast of a lower exchange rate of about $740/litre, had remained illiquid and unable to provide the $25m to $30m required for the importation of PMS by dealers.


This, they said, had led to the suspension petrol importation by dealers who were initially eager to import the commodity.

Operators told The PUNCH that the only marketer, Emadeb, who imported the commodity recently, was now finding it tough to recoup its investment due to the depreciation of the naira.

Senior officials of major oil dealers, who spoke to The PUNCH in separate interviews on Sunday, said PMS price hike was imminent unless the local currency appreciates in the coming weeks.

Leaders of the Major Oil Marketers Association of Nigeria of Nigeria, Independent Petroleum Marketers Association of Nigeria, and Petroleum Products Retail Outlets Owners Association of Nigeria said there was a need for the Federal Government to intervene to address the crisis.

The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Chinedu Ukadike, explained that the price of petrol was now driven by the fluctuations in forex, hence Nigerians should expect a hike soon.

Asked whether oil marketers were considering an increase in petrol price, he replied, “Once there is a slack in the naira against the dollar, there is going to be an effect. The demand and supply of forex is a key factor. We should also understand that it is not only petroleum products that use forex.

“Other manufacturers who import one thing or the other are also searching for dollars. So, the surge for dollars has continued to increase. So now that the dollar is hitting N910 to N940, and approaching N1,000, you should expect to buy PMS at the rate of N750/litre.

“It is simple mathematics, once the dollar is going up, have it in mind that the prices of petroleum products would definitely increase because the products are dollar-driven.”

Ukadike stated that oil marketers were still sourcing dollars from the parallel market, as the CBN’s Importers and Exporters official window was illiquid.

“Nigerians should brace for a price regime of between N680 to N720 if the exchange rate stays around N910 to N950/$, but the price is going to hit N750 once the dollar rises to N1,000.


“This is because marketers still source dollars from the parallel market, and not only marketers but virtually all importers in Nigeria. There is no subsidy any more on petroleum products, so you expect the cost to fluctuate with the dollars,” he stated.

The IPMAN PRO also stated that the Nigerian National Petroleum Company Limited was still the major importer of petrol into Nigeria, though another importer, Emadeb, imported the commodity recently.

“NNPC is still the major importer for now. One other company, Emadeb, imported products recently, but because this product is being sold in naira, getting back their funds is another issue since the naira keeps depreciating, while PMS imports is in dollars.

“This is why it is often difficult to go back and buy again as an independent importer. That is the problem we are facing,” Ukadike stated.

On when Nigerians would start seeing the price increase, he said, “NNPC is like the sole distributor of petroleum products now, so once you see a change in the price of petrol at their outlets, then other marketers will implement it.”

Marketers not importing

The Executive Secretary, Major Oil Marketers Association of Nigeria, Clement Isong, alluded to the fact the dealers were not importing petrol despite the fact that the government recently issued licences to about six marketers to bring in products.

Asked to speak on the import of PMS by other marketers and whether they were sourcing forex from the I&E window or the parallel market, Isong replied, “The I&E window is illiquid. There’s no money there.

“To buy products, it costs you between $25m to $30m. You can’t find it in the I&E window. So it doesn’t work and that is why people are not importing.

“We can’t find dollar again, you can’t find it right now. Nigeria has to sort out the security issues in the Niger Delta so that we can increase our daily crude oil output. If we increase it to 1.8 or two million barrels per day, then there’ll be dollar in the market. So we need to stop oil theft.”

FG should intervene

On the apprehension of a possible hike in petrol price, Isong stated that this was inevitable if the dollar continued to rise against the naira, but noted that the government might have to intervene.

“Well, the President himself said in his speech that if they find petrol prices moving too high, they would intervene. We don’t want prices to move too high, nobody wants that.

“So if the dollar continues to climb, we are expecting some sort of intervention from the government based on what the President said,” the MOMAN official stated.

He further explained that PMS was different from diesel in terms of pricing because petrol was newly deregulated.

“The dealer that has bulk of the stock is the NNPC. So it influences the price in the market. Diesel, on the other hand, is different, because it has been deregulated for a very long time. So people will sell petrol depending on their cost structure, loans they took from the banks, forex, etc.

“Many things are put into consideration by dealers before coming up with their selling prices. There’s no one person who sets or controls the price. Nobody is controlling the price of PMS. Right now, NNPC, however, will continue to control the flow of the price. But after a while, that will stop,” Isong explained.

Earlier, the President, PETROAN, Billy Gillis-Harry, while speaking on the matter, had said, “So long as the naira is losing against the dollar, the price of petrol in our retail outlets will continue to increase. To address this, he called on Tinubu to make sure that Nigeria’s refineries were put back to use.

“We have requested that the President should declare a state of emergency on our refineries in order to speed up their repairs.

“That is the one sure way to go, in order to be able to predict the price of petroleum products, because for now, every PMS you buy in any retail outlet is dollarised,” Gillis-Harry stated.

Meanwhile, the CBN last week attributed the continued fall of the naira against the dollar to the diversion of Diaspora remittances to the parallel market.

The CBN Acting Governor, Folashodun Shonubi, spoke while delivering a lecture titled ‘Diaspora Remittances and Nigeria Economic Development’ at the National Institute for Security Studies in Abuja.

Shonubi said a lot of Diaspora remittances arrived in Nigeria in dollars and end up in the parallel market without being officially documented.

It is still unclear at what point the President Bola Tinubu administration plan to intervene in the market to arrest the unfolding crisis.

Source: https://punchng.com/Forex-crisis-Marketers-propose-N720/litre-suspend-fuel-imports

Hardship looms, Tinubu ought to have fixed the refineries before removing subsidiaries, now hardship knows no party affiliation, both Apc, pdp, labour party supporters feels the pains.

What if crude rises to $150 a barrel?

Fixing a deregulated price is a wrong idea. It gives false hope to consumers.

WildChild00:
Hardship looms, Tinubu ought to have fixed the refineries before removing subsidiaries, now hardship knows no party affiliation, both Apc, pdp, labour party supporters feels the pains.

How could he have repaired the refineries while paying subsidy ?
One had to go for the other. We have no choice but to endure the difficult time while hoping and praying our leaders get it right.
The current hardship is a global pandemic.

Oil marketers are one of the problems we have in Nigeria. They are just too selfish with everything

Haaa egba mi?
Is dangote refinery not coming up again?!
Abi why refining what we have freely abroad.
Truthfully Nigeria na scam.

Holla911:


How could he have repaired the refineries while paying subsidy ?
One had to go for the other. We have no choice but to endure the difficult time while hoping and praying our leaders get it right.
The current hardship is a global pandemic.

So using the citizenies as sacrifice is better, before resuming office, he ought to have a blue print, how can you have natural resources and you take it out of your country to refine and import back to your country for use, refinaries should have been fixed first then subsidy removal follows.

WildChild00:
Hardship looms, Tinubu ought to have fixed the refineries before removing subsidies, now hardship knows no party affiliation, both Apc, pdp, labour party supporters feels the pains.

Fixing the refineries won't have caused a reduction in price by much. (Some say N70).

The refineries still have to be maintained, and repaired and kept in good working order, and they still have to pay workers at competitive rates. Guess what, we still have to import components for the refineries from abroad, then they have to pay taxes, and pay for community projects.

And all that costs money.

Fuel isn't cheap. Niger, Ghana refine fuel from domestic crude, and fuel costs above N800 in both countries.

NNPC is still the major importer for now. One other company, Emadeb, imported products recently, but because this product is being sold in naira, getting back their funds is another issue since the naira keeps depreciating, while PMS imports is in dollars.

“This is why it is often difficult to go back and buy again as an independent importer. That is the problem we are facing,” Ukadike stated.

Of course it was always obvious to those of us who are not sold out dummies who live and breath propaganda that importers in Nigeria never had the means to import.

The cost of importing and its attendant risk is too high for any properly run private business to be able to afford consistently at the rate your expect for petrol in Nigeria. Only propagandists with wild and ridiculous claims that subsidy removal will solve all our petroleum issues thought that way.

Mind you, the fact that NNPC is still the major importer implies that the system is NOT deregulated because we all know NNPC does not source for dollars like everyone else.

The implication of this is that the much touted "market forces" is not the demand and supply of the product. Rather it is the demand and supply of dollars. That's what Nigerian market is battling with.

If by a stroke of good fortune, the price of crude rises above $100, the real distortion will become too obvious because while FG and NNPC will be rejoicing, the private sector and ordinary Nigerians will be writhing in pain.

The conclusion of all this is that the subsidy removal experiment has failed.

We need to bring back subsidy as Tinubu himself recognised in his last speech (it was never really gone anyway just shifted hands) and get serious as a nation by ensuring our refineries work and others are encouraged to come upstream. If not, our local currency which is the bedrock of the real productive sector will be worth nothing more than cowries soon.

WildChild00:



So using the citizenies as sacrifice is better, before resuming office, he ought to have a blue print, how can you have natural resources and you take it out of your country to refine and import back to your country for use, refinaries should have been fixed first then subsidy removal follows.

Because for many years, under the guise of subsidy, we were selling fuel at a loss, and paying a subsidy to cover the loss...which it could never do adequately. That led to the refineries running down, and then we became an importer.

We could have gotten the refineries up and running again by removing subsides and privatising NNPC, cutting it off from free government money and forcing it to work for its money.....like a legit company.

But Nigerians kept saying no to subsidy removal, encouraged by people like Tinubu who is in power now. And right now, we are in so much of debt that we cannot pay for subsidies anymore. Not without going into even larger debt. Not without running out of money in the next 5 years.

It is either we pay the market price of fuel from our pockets, or we pay for it at IMF rate in a few years, at IMF conditions.

You don't have to like it. I don't. But for me it is either we suffer a lot now, or we get ten to twenty times what we suffer now in a few years...where the bank would be telling you you cannot withdraw money because there is no money.

helinues:
Oil marketers are one of the problems we have in Nigeria. They are just too selfish with everything

So, you want them to keep selling at a loss so that you can have cheap fuel?

Tell me oga, would you let government set your price for you? So that the poor can breathe.?

People need to make a living, and things cost money. Including fuel.

nairalanda1:


Fixing the refineries won't have caused a reduction in price by much. (Some say N70).

The refineries still have to be maintained, and repaired and kept in good working order, and they still have to pay workers at competitive rates. Guess what, we still have to import components for the refineries from abroad, then they have to pay taxes, and pay for community projects.

And all that costs money.

Fuel isn't cheap. Niger, Ghana refine fuel from domestic crude, and fuel costs above N800 in both countries.

Yes I agree it's expensive to repair and maintain a good standard refinary, the question is has the govt explore other avenues, like encourage local refineries, do you know that petroleum products can be refined locally?

nairalanda1:


So, you want them to keep selling at a loss so that you can have cheap fuel?

Tell me oga, would you let government set your price for you? So that the poor can breathe.?

People need to make a living, and things cost money. Including fuel.

It's only in Nigeria whatever goes up never come down most especially the price of goods and services

WildChild00:



Yes I agree it's expensive to repair and maintain a good standard refinary, the question is has the govt explore other avenues, like encourage local refineries, do you know that petroleum products can be refined locally?

Well, it starts by ensuring that the refineries would be profitable once in operation, and that can only happen if subsidy is removed.

Because, many private refineries have to look for financing from banks, and if the bank ain't sure they would see their money again, they won't lend.

Hence subsidy has to go.

helinues:


It's only in Nigeria whatever goes up never come down most especially the price of goods and services

Yes, because we labour under the idea things must be cheap.

The sad thing is, people want to make money. People have families to bring up, and have to pay employees, have to pay for equipment upgrades and have to pay for a lot of stuff.

Prices are going up everywhere.

But still, at the end, it is partly the fault of the APC you support, and the PDP some of your oppositie numbers support. Nigeria is the way it is because the leadership has not gotten our economy out of its dependence on oil, nor has it gotten our economy to a economy that utilizes its raw materials to make goods the world needs.

Until your tinubu takes those hard decisions, nothing is going to change. But at the end, it is counterproductive to spend money pretending that fuel is cheap. We are in massive debt because of forty to fifty years of pretending. Time it stopped.

nairalanda1:


Well, it starts by ensuring that the refineries would be profitable once in operation, and that can only happen if subsidy is removed.

Because, many private refineries have to look for financing from banks, and if the bank ain't sure they would see their money again, they won't lend.

Hence subsidy has to go.

This is the areas govt intervention is needed, the govt should encourage banks and other money/finance lending institute to lend out monies to local refineries owners and even grant them tax holidays, also interest free loans too.

nairalanda1:


Yes, because we labour under the idea things must be cheap.

The sad thing is, people want to make money. People have families to bring up, and have to pay employees, have to pay for equipment upgrades and have to pay for a lot of stuff.

Prices are going up everywhere.

But still, at the end, it is partly the fault of the APC you support, and the PDP some of your oppositie numbers support. Nigeria is the way it is because the leadership has not gotten our economy out of its dependence on oil, nor has it gotten our economy to a economy that utilizes its raw materials to make goods the world needs.

Until your tinubu takes those hard decisions, nothing is going to change. But at the end, it is counterproductive to spend money pretending that fuel is cheap. We are in massive debt because of forty to fifty years of pretending. Time it stopped.

Imagine once a Pdp supporters on this forum claiming saint..

Would any of the presidential candidates removed fuel subsidy without Nigerians goin through some hardship for some time

You people are not interested to face the reality of things apart from blaming games

WildChild00:



This is the areas govt intervention is needed, the govt should encourage banks and other money/finance lending institute to lend out monies to local refineries owners and even grant them tax holidays, also interest free loans too.

Yes, they should, but still, subsidy has to go, so that the refineries make enough profit to pay back any loans taken.

Dangote was able to build a refinery because he got loans from banks local and internantional. And if he did not pay back the loans, the banks will take over his other lucrative assets and pay themselves back.

“Well, the President himself said in his speech that if they find petrol prices moving too high, they would intervene. We don’t want prices to move too high, nobody wants that."

How would they intervene if not through subsidies

Back to where we all began

I said it then that the "Subsidy is gone" pronouncement was the most thoughtless pronouncement ever made by a president

How can you remove subsidy on petrol without a single local refining capacity.
Where on earth is that done.

helinues:


Imagine once a Pdp supporters on this forum claiming saint..

Would any of the presidential candidates removed fuel subsidy without Nigerians goin through some hardship for some time

You people are not interested to face the reality of things apart from blaming games

Well, I support neither PDP nor APC (and lol, I've been called all sorts of names on this forum...including being an APC supporter).

Also, I support subsidy removal. It is evident from my comments here. I was happy when all the main candidates and most of the minor candidates all backed subsidy removal in full. If it was Obi or ATIKU IN charge removing subsidy, I would back them.

But you are complaining about fuel marketers increasing prices, and then saying Nigerians have to go through hardship.Make up your mind on which one you support.

These policies being implemented on a trial and error basis are those kind of things commuters in Lagos public vehicles and the callers on radio programs have been pushing for long without weighing the consequences.

Imagine basing your economic policies on commuters conjectures.

nairalanda1:


Well, I support neither PDP nor APC (and lol, I've been called all sorts of names on this forum...including being an APC supporter).

Also, I support subsidy removal. It is evident from my comments here. I was happy when all the main candidates and most of the minor candidates all backed subsidy removal in full. If it was Obi or ATIKU IN charge removing subsidy, I would back them.

But you are complaining about fuel marketers increasing prices, and then saying Nigerians have to go through hardship.Make up your mind on which one you support.

You are the one trying to wail for nothing cos I created a thread about the possible hardship even before the inauguration.

That shining gold metal went through hell before it became what it is.

We need to save reasonable amount of money before spending as we are no longer ready to be borrowing unnecessarily.

Well, the main thing from the article is simple. We are not earning enough dollars to import fuel.

Which means that prices will keep rising till we get domestic fuel refining back on track...and even then...

For more reasons why I back subsidy removal , read the following

Reflections on fuel subsidy removal

For reasons why subsidy removal may not be what it is made up to be

Three myths about subsidy removal

helinues:


You are the one trying to wail for nothing cos I created a thread about the possible hardship even before the inauguration.

That shining gold metal went through hell before it became what it is.

We need to save reasonable amount of money before spending as we are no longer ready to be borrowing unnecessarily.

All in all, at the end of the day, price controls that you are subtly advocating , never ever worked.

You won't let government set your price. So, stop complaining about rise in fuel price. It's called capitalism. It's not the best system in the world...but sadly people WANT TO BE PAID.

And here we are.

Holla911:


How could he have repaired the refineries while paying subsidy ?
One had to go for the other. We have no choice but to endure the difficult time while hoping and praying our leaders get it right.
The current hardship is a global pandemic.

We have no reason to endure any hardship or difficult time. Stop typing Balderdash to be hoping and praying. Hoping and praying does not fix anything.

The refineries we keep talking about, are they not paying Salaries every month? The Crude Oil that used to go to all the refineries where do they now go to? Have the supply been shut off? Who is the Maintenance Manager of the refineries...why has the Maintenance manager or maintenance department not been replaced for many years to get a functional maintenance team in place to get results.

Hoping and praying is not a Solution.

nairalanda1:


All in all, at the end of the day, price controls that you are subtly advocating , never ever worked.

You won't let government set your price. So, stop complaining about rise in fuel price. It's called capitalism. It's not the best system in the world...but sadly people WANT TO BE PAID.

And here we are.

If we have been more production country, we could have been earning more forex from exporting our local products rather than waiting for fuel forex to determine the stability of Naira.

Now that the oil marketers want to increase the price of fuel just because dollar is high, would they reduce the oil price when the dollar is low?

How can we as a country of 200m plus still be importing fish and turkey when we can start the mass production here. We waste our forex reserves importing unnecessary things

helinues:


If we have been more production country, we could have been warning more forex from exporting our local products rather than waiting for fuel forex to determine the stability of Naira.

Now that the oil marketers want tonincrwase the price of fuel just because dollar is high, would they reduce the price when the dollar is low?

That's why your Tinubu has to make the hard choices needed for Nigeria to be more productive, and earn more dollars....

And then everything would fall in its place.

But cheap fuel? That ship has sailed. There never was anything like cheap fuel. Someone is paying for it somewhere.

nairalanda1:


That's why your Tinubu has to make the hard choices needed for Nigeria to be more productive, and earn more dollars....

And then everything would fall in its place.

But cheap fuel? That ship has sailed. There never was anything like cheap fuel. Someone is paying for it somewhere.

Importation of some products must be reduced to start with, what's the meaning of importing fish, Turkey, books, toothpicks, the annoying part we make our native wear here and also sew it, same as shoes, why are we still Importing second hand clothes and shoes?

We waste our forex reserves importing unnecessary things

nairalanda1:


Because for many years, under the guise of subsidy, we were selling fuel at a loss, and paying a subsidy to cover the loss...which it could never do adequately. That led to the refineries running down, and then we became an importer.

We could have gotten the refineries up and running again by removing subsides and privatising NNPC, cutting it off from free government money and forcing it to work for its money.....like a legit company.

But Nigerians kept saying no to subsidy removal, encouraged by people like Tinubu who is in power now. And right now, we are in so much of debt that we cannot pay for subsidies anymore. Not without going into even larger debt. Not without running out of money in the next 5 years.

It is either we pay the market price of fuel from our pockets, or we pay for it at IMF rate in a few years, at IMF conditions.

You don't have to like it. I don't. But for me it is either we suffer a lot now, or we get ten to twenty times what we suffer now in a few years...where the bank would be telling you you cannot withdraw money because there is no money.

Alagba, they are not even talking about subsidy here in the report. What the report is about is forex. Did you read it at all?

You are still talking about subsidy that has been removed? They have removed it for you as you have advocated.

Your 10-20 years projected suffering is foolish. You don't even have any idea what suffering entails. You don't even know what destabilization that would occur before next year or two and you are making foolish 10 - 20 year projections.

Try and reason like a human being who has higher capacity than lower animals. What exactly are the projections based on? Nothing but wishful thinking.

Have you factored in sudden international or even national occurrences that might happen along the line? War in the Balkan; Tension or possible war between US and China? NATO-Russo war? Massive global economic and financial turmoil? Another pandemic?

Did you know if there would be coup in Niger by this time last year, for instance? Have you considered that Nigeria might be spending so much money out of the socalled subsidy savings in prosecuting a needless war in the coming months?

porka:


Alagba,

Thanks, that's quite good enough from you.

Good morning.

nairalanda1:


Fixing the refineries won't have caused a reduction in price by much. (Some say N70).

The refineries still have to be maintained, and repaired and kept in good working order, and they still have to pay workers at competitive rates. Guess what, we still have to import components for the refineries from abroad, then they have to pay taxes, and pay for community projects.

And all that costs money.

Fuel isn't cheap. Niger, Ghana refine fuel from domestic crude, and fuel costs above N800 in both countries.

but they said dangote refinery will start refining fuel. Why has it not start working. didn't tinubu know that dangote refinery wsant working before he removed subsidy. He must have known but the citizen are the one to be use as sacrifice

delkuf:
but they said dangote refinery will start refining fuel. Why has it not start working. didn't tinubu know that dangote refinery wsant working before he removed subsidy. He must have known but the citizen are the one to be use as sacrifice

Ask Dangote...plus if he does come on line, fuel won't fall to N70 per liter .