By Sebastine Obasi
Major Oil Marketers Association of Nigeria, MOMAN and Depot and Petroleum Products Marketers Association of Nigeria, DAPPMAN, last weekend, called for full deregulation and unfettered access to foreign exchange, FOREX, from the Central Bank of Nigeria to enable them petrol available to every nook and cranny of the country.
This is coming on the heels of the N5 per litre slash in the price of petrol scheduled to take effect from today, Monday, December 14, 2020.
Chairman DAPPMAN, Mrs. Winifred Akpani, said; “the inability to source FOREX from the official CBN FOREX window by independent marketers is continually hindering the effectiveness of the principles of demand and supply market forces to correct the current inefficiencies in the pricing mechanisms adopted in the deregulation process.”
Mrs. Akpani also explained that inability of marketers to source FOREX has created a situation which can be described as “pseudo subsidy” in the market.
She said a large portion of marketers’ costs are FOREX dependent and must be sourced from the parallel FOREX market. “There still exists some form of indirect subsidy within the market and this can be attributed to reasons why price of petrol continues to have an upward trajectory even when international crude oil prices are going downwards'” she said.
Also speaking, the Chairman of MOMAN, Mr. Adetunji Oyebanji stated that “Nothing has changed. The FOREX issue is still like that. And as you can see, the government has also extended that DSDP (the exchange of crude for refined petroleum products) arrangement. That’s a signal to you that foreign exchange may not be there for us to access.”
MOMAN believed that the deregulation process should do away with country operating the DSDP system where crude is swapped for petroleum products through the NNPC and PPMC, rather they should put in place a system that allows the country sell its crude to raise the needed FOREX and allow operators access some of these foreign exchange through the CBN FOREX window to source products at the best possible prices, thereby allowing the forces DEMAND and SUPPLY dictate the economics of the sector for a more efficient deregulated market.
Also, months after ending the petrol subsidy era, deregulated the downstream petroleum industry and given private independent marketers permission to resume importation of petroleum products, the marketers are yet to participate in the importation business due to their inability to access foreign exchange (FOREX).
These stakeholders DAPPMAN, MOMAN, the Independent Petroleum Marketers Association of Nigeria (IPMAN) have continued to depend on the Petroleum Products Marketing Company (PPMC), the petrol importing arm of the Nigerian National Petroleum Corporation (NNPC) for the supply of products and as such the deregulation of the sector is still been fraught with some of the inefficiencies that the deregulation process is meant to address.
It would be recalled that last September, the Group Managing Director (GMD) of the NNPC, Mallam Mele Kyari, had assured the marketers that concrete steps were been taken to address their main concerns, especially the issue relating to the availability of FOREX, stressing that the CBN had already taken the first step of merging all FOREX windows to have a unified exchange rate, though this is yet to see the light of day.
According to the GMD, “It is really not in our interest to be the sole importer of premium motor spirit, PMS, in the country. We have taken definite steps to exit the situation. This is a definite step taken and the details would be communicated to stakeholders like DAPPMAN, MOMAN, IPMAN and others outside this forum,” Kyari had stated at a forum with marketers.
However, three months since the assurance was made, marketers are yet to see any change and are still encountering the same challenge posed by difficulty in accessing FOREX, as such NNPC continues to play the role of sole importer of petrol as only it can access FOREX at the official rate of about N380 or there about, to a dollar, thereby still holding an unfair advantage in terms of access to FOREX, which is critical to securing importation of petroleum products.