… Queues reemerge In Lagos
…landing cost now N720 per liter
The Federal Government might have informally acknowledged to fix the cost of a litre of Petroleum at N750 regardless of the conversion scale of the Naira to the American dollar, an industry source told Business Standards on Thursday. This was even as lines got back to Lagos filling stations.
According to the source, the government might have presumably arrived at the resolution that any cost above N750 would hereafter be viewed just like own misfortune or loss.
This action by the government has confirmed that the subsidy has returned despite the drama that greeted its removal by President Bola Ahmed Tinubu during his inauguration as president.
Queues have started building at some filling stations in Lagos, an indication of the precarious fuel situation Nigeria is passing through on account of the lack of foreign exchange to purchase the product at a fairly reasonable price and the continuous increment in the prices of crude oil.
Long queues are witnessed at NNPCL Retail filling stations while a number of independent filling stations are either not selling or the few selling are chaotic, as motorists and people who want to buy fuel for their generators were struggling to outsmart each other.
As of Thursday, it is believed that the landing cost of a litre of petrol could not be less than N720 per litre while the highest cost at most filling stations is N617 per litre officially.
This situation has made a number of marketers abandon fuel depots where they usually load their products.
Business Standards had reported that the government may have been subsidizing fuel to the tune of about N300 per litre since the exchange rate hit N1000 to $1 some weeks ago.
Many people that wanted to buy fuel at some of the filling stations that are selling fuel had to return home because of the chaotic situations at the filling stations
A good number of Petroleum products depots are currently deserted due to a lack of products caused by foreign exchange rate volatility, as the landing cost of petrol hits N720/litre, up from N651/litre, oil marketers said on Thursday.
Petroleum products dealers also stated that filling stations were shutting down daily in large numbers, as it was becoming increasingly tough to run the business. They said this could lead to widespread fuel scarcity in the coming months.
It was further gathered that the landing cost of PMS into Nigeria had increased to N720/litre, in August this year.
Speaking at the National Executive Council meeting of the Natural Oil and Gas Suppliers Association of Nigeria, in Abuja on Thursday, the National President, NOGASA, Benneth Korie, said a lot of depots were presently dried up or out of stock.
He said, “Depot owners are so terribly affected by the increasing cost of crude oil and exchange rate, to the extent that many depots are practically deserted as their owners are unable to secure bank loans to fund their business due to high-interest rates.
“Banks are not willing to guarantee funds release to stakeholders as a result of the difficulty, instability and galloping rates of foreign exchange and high cost of the dollar. Many depots are presently dried up or out of stock, and this is no gainsaying as it is evidently verifiable.”
He added, “Worst hit are filling stations whose owners find it extremely difficult to secure funds to procure products for their retail outlets. Both independent and major marketers are terribly affected.
“As of today, filling stations are shutting down in great numbers on a daily basis and dealers are going out of business, with many more on the verge of bankruptcy because of their inability to secure funds to facilitate orders for their stations.”
According to Korie, the government must therefore urgently come to the aid of the industry as quickly as possible to save it from an impending colossal collapse, which would result in a more devastating blow to the economy at large.
The Chief Executive Officer, PETROCAM Trading (Nig) Ltd., Patrick Ilo, during an interview session with The PUNCH, said 52,000 metric tonnes of petrol imported by the company on Tuesday was already N720/litre without subsidies.
According to him, if the landing cost was already N720, the pump price should be around N729/litre in Lagos State if the Federal Government had truly stopped subsidising the product.
“This is the second time I am bringing in my vessel. But after bringing it in, I am trapped. I can’t sell it because I landed my own product at N720. And if you add transportation from depot to station, the value today should be N729/litre at the pump.”
He blamed the price hike on high foreign exchange rate, adding that the Federal Government was still subsidising petrol through the Nigerian National Petroleum Company Limited.
The foreign exchange rate of the Central Bank of Nigeria as of Wednesday was around N766/$1, while it hovered around N990/$ at the parallel market.
He said.”Yes, PETROCAM has an import license, and we have products in Nigeria