The Independent Petroleum Marketers Association of Nigeria (IPMAN) has called on the Federal Government to halt the importation of Premium Motor Spirit (PMS), arguing that imported petrol now costs significantly more than locally refined products and is fuelling price instability in the downstream petroleum sector.
The association said the continued issuance of petrol import licences by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) was undermining domestic refining, placing additional pressure on the naira and frustrating efforts to achieve stable fuel prices.
Speaking with The PUNCH, IPMAN National Publicity Secretary, Chinedu Ukadike, said marketers were disappointed that imported petrol was selling for around ₦1,350 per litre, well above the prices offered by the Dangote Petroleum Refinery, despite the policy being introduced to encourage competition.
"Independent marketers have looked at the issues of price volatility, import licences and the sale of petroleum products in dollars. I want to use this opportunity to urge the Federal Government to transparently review these issues through the Nigerian Midstream and Downstream Petroleum Regulatory Authority, which is the industry's regulator.
"The recent import licences, which were expected to serve as a guide and a check on the prices of petroleum products refined locally, are not yielding the results we expected. We were shocked that the licences issued to depot owners to import petroleum products are resulting in prices of about ₦1,350 per litre, which is far higher than what Dangote has been selling to us," he said.
Ukadike maintained that the import policy had failed to achieve its intended objective of moderating domestic prices, insisting that imported fuel was not only more expensive but also raising concerns about product quality.
"The essence of the NMDPRA and the Federal Government opening up import licences was to check domestic fuel prices. Instead, we have found that the imported products have questionable quality and are more expensive.
"What is the essence of issuing these licences? They will only create tension in society. Price volatility is deepening and is affecting independent marketers. We do not know what to expect or where to turn," he stated.
According to him, the landing cost of imported petrol is now substantially above Dangote Refinery's ex-depot price, making continued importation economically unjustifiable while placing unnecessary demand on scarce foreign exchange.
"The implied offshore price of petroleum products is almost 20 per cent higher than Dangote's prices. So, what is the essence of importing products from Lomé when they are more expensive than Dangote's? It does not make any sense. It is putting unnecessary pressure on the dollar and the naira.
"That pressure has pushed the exchange rate to about ₦1,400 to the dollar, which is also affecting petroleum product prices in Nigeria," Ukadike added.
He urged the Federal Government to resolve the challenges surrounding the naira-for-crude arrangement by ensuring uninterrupted crude oil supply to Dangote Refinery in naira, saying this would guarantee adequate local production and reduce dependence on imported fuel.
"The Federal Government should sit down with the presidential committee to examine the challenges Dangote is facing and ensure crude continues to be supplied in naira so that Dangote can keep producing enough petroleum products for the country," he said.
Ukadike argued that Nigeria's recent experience during the Strait of Hormuz crisis demonstrated the importance of domestic refining, noting that the country maintained uninterrupted fuel supplies despite disruptions to global shipping routes.
"One of the biggest gains Nigeria recorded during the crisis in the Strait of Hormuz was the uninterrupted supply of petroleum products from Dangote. If we already have continuous supply, then our challenge is pricing.
"Is it not better to address pricing than continue issuing unnecessary import licences that will only inflate fuel prices? Nigeria should put Nigeria first. Let us maintain and support the refineries we have," he said.
He further called on the government to prioritise indigenous refining by supporting local refineries while positioning Nigeria to earn foreign exchange through exports of refined petroleum products.
"We are talking about government-owned refineries, but this indigenous refinery has helped Nigeria avoid the embarrassment associated with the Strait of Hormuz crisis. We should support it and ensure fuel prices come down.
"Nigerians are suffering. This is the time for national unity. This is the time to support our industrialists and refiners producing petroleum products in Nigeria.
"Nigeria can also earn foreign exchange by exporting refined petroleum products. The government should ensure there is sufficient supply for local consumption while also supporting exports," he said.
Recalling Nigeria's former dependence on imported fuel, Ukadike said the commencement of large-scale refining by Dangote Refinery had significantly strengthened the country's energy security.
"At this point, we must focus on strengthening our national economy, sustaining our ecosystem and ensuring uninterrupted petroleum product supply.
"I remember when we depended entirely on imported petroleum products. Sometimes we experienced shortages that lasted two or three weeks. Since the Dangote refinery commenced operations, there has been no fuel scarcity.
"Nigeria should focus on the benefits of domestic refining, reliable fuel supply and energy security," he added.
The Federal Government has continued to approve petrol import licences despite increased domestic refining capacity, maintaining that imports remain necessary to promote competition and bridge supply gaps. However, industry stakeholders have continued to argue that stronger support for local refining would reduce pressure on foreign exchange, enhance energy security and help moderate domestic fuel prices.
~ petroleumprice.ng
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