The Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, (NMDPRA) Farouk Ahmed on Monday said oil marketers have commenced the importation of petrol into Nigeria.
He spoke at a crucial meeting of stakeholders in Lagos.
He explained that out of the 56 oil marketing companies that applied for licences, 10 have demonstrated commitment while three have imported fuel into Nigeria.
He said the three companies that have started importing petrol are as A.Y. Ashafa imported 59,000 litres, Emadeb 15,000 litres and Prudent (15,000 litres).
Meanwhile, the Major Oil Marketers Association of Nigeria (MOMAN) has said that some of the oil marketers, were still studying the environment before importing into Nigeria Premium Motor Spirit, popularly called petrol or fuel.
MOMAN Chairman, Mr Olumide Adeosun in an interview with New Telegraph also noted that the dollar has been rising against the naira in the foreign exchange (FX) market.
He stated that marketers needed to study the terrain very well to avoid incurring great losses which can make them bankrupt.
He added that they will start to import as soon as it becomes clear to them.
Adeosun said, “Some of the licensed importers are studying the terrain because of the forex before importing. You can not blame them. When your fortune has been lost in this business, if miscalculate in the importation, you may lose your capital. It is not a game to be taken lightly at all.
”Many of us have always renewed our quarterly importation licenses. We are business people. There has been a lot of interest and inquiries in the type of information that will allow us to get to engage readers properly to get an idea. All of those things are based on numbers. As soon as the numbers make sense, it will start to come.
“Fortunately, quite apart from the natural delay in the amount of time it takes to close the commercials and the operations of importation, quite an amount of the tension you see today has to do with the exchange rate. The exchange rate is one of the key things, factored into the cost of the product, the dollar being the international price of the product itself, and the cost of it. It is still a challenge right now.”
He added, “The FX rate few days was about $780 to $1 and it is going up. There is a lot of demand for the dollars. A lot of us are still looking at the numbers. A few weeks ago, I was a bit more bullish in terms of when it was going to happen but the reality is that nobody wants to bring in the product and push people with the price. No matter how realistic it is, I think everyone is still careful and wants to ensure bringing in the product at the price that the product can move.”
“Contrary to what people think, we are not in a high margin. We are in a turnover volume business. So it is important to us that if a trader brings a product in, it has to move quickly through the system so that the market can bring the product in, sell it quickly, change the money into dollars, go back to the market and buy some more. That is the cycle we prefer, rather than storing oil and pushing it through the value chain until it gets to our customers.”
