…Assures adequate PMS supply at Christmas
Amid growing concerns surrounding availability of Premium Motor Spirit (PMS), the Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN) has called on the government to give petroleum marketers access to foreign exchange at the official Central Bank of Nigeria (CBN) rate to enhance the supply and distribution of PMS across the nation.
Speaking at a press conference in Lagos today, DAPPMAN Chairman, Mrs. Winifred Akpani, said the burden of sourcing forex through the parallel market for transactions domiciled in Nigeria has left petroleum marketers in “dire straits”.
Her words: “Accessing dollars for our operations has been an insurmountable hurdle for petroleum marketers. The difference between CBN exchange rate and the parallel market exchange rate continues to get wider by the day.”
Akpani noted that in addition to core operational expenses that are denominated in USD, petroleum marketers also contend with sourcing funds from the parallel market to pay for fees and levies to regulators like the Nigerian Ports Authority (NPA) and the Nigerian Maritime Administration and Safety Agency (NIMASA) and some other unauthorised charges.
“For example, to charter a vessel to convey 20,000 MT of PMS within Nigeria for 10 days, freight charges are denominated in USD, that comes to about N220 million at official FX rate of N440 and a whooping №440 million for petroleum marketers who have to source FX from the parallel market at N880. This implies an additional cost of N11 per litre for this transaction due to the FX official/parallel market differential,” she said. According to her, for the same transaction, Jetty fees, also charged in USD amount to N15.4 million at official FX rates and N30.8 million for petroleum marketers who source from the parallel market.”
“In addition, jetty berth is charged in USD and comes to N2.2m at official FX rate and N4.4 million at parallel market rate, while Port dues, charged in USD by the Nigerian Ports Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA), which are charged in USD, come to N71.51 million at official FX rate and N142.796 million for marketers who source FX from the parallel market,” she said.
The group advised the federal government to establish a level playing field in the sector by giving petroleum marketers access to FX at the CBN exchange rate for their operations, even as it expressed optimism that the post fuel-subsidy era would lead to healthy competition, efficiency and competitive pricing.
“DAPPMAN considers the government’s plan to remove subsidy in 2023 as the right decision that will reposition the sector for sustainable growth and development, while freeing up funds to shore up the capacity needed to transform the health, education, defence, and transportation sectors among others.”
“As we approach the Yuletide and transition to the election year in 2023, the nation needs the full involvement of all operators to shore up capacity and ensure product availability at excellent service levels. While there might be fears regarding possible scarcity of PMS, DAPPMAN assures Nigerians of its ability and willingness to work assiduously to ramp up supply as the government addresses the challenges of FX availability in the sector,” she added.
DAPPMAN, however, lauded the federal government and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for emerging gains in the sector, especially, following the introduction of the Petroleum Industry Act.