Large consignments of Premium Motor Spirit, popularly called petrol, being imported by major oil marketers, are to hit Nigeria from next week and may force down the price of the commodity, both major and independent dealers stated on Sunday.
It was also gathered that crude oil refiners were currently releasing refined petroleum products on credit to dealers from Nigeria, following the recent unification of the country’s exchange, which boosted the confidence of operators.
This came as the Independent Petroleum Marketers Association of Nigeria said that they would compete with the Major Oil Marketers Association of Nigeria and the Nigerian National Petroleum Company Limited on the importation of petrol, stressing that this would crash the cost of PMS.
Before President Bola Tinubu removed subsidy on petrol, the product was solely imported by NNPCL, as other marketers stopped its imports due to their inability to access the United States dollar.
At the time, oil marketers explained that the NNPCL was accessing the dollar at a lower rate, which was unfair and did not support PMS importation by other dealers.
But with the recent unification of the exchange rate, oil marketers had to join in the importation of petrol and confirmed that the products should be arriving Nigeria from next week.
The Executive Secretary, Major Oil Marketers Association of Nigeria, Clement Isong, said, “I will simply say between the second and third week of July.”
Isong, however, explained that the NNPCL had made a lot of fuel imports, as some of its vessels were still on the way to Nigeria.
“Let me say that NNPCL has imported significantly to prevent the country from running dry. The vessels NNPCL imported are offshore Nigeria, so they have a significant volume, therefore in all circumstances the country will not run dry.
“So the option everybody has is that they can buy from NNPCL ex-depots or they can go and import from Europe or from other places. The assignment is that you compare your price if you buy from NNPCL or import from Europe.
“More or less, the taste of the pudding is in the eating. So do your calculation as the best as you can. But you will only know the full impact when the product is in your tank. If it goes right, it is then that you will know how competitive your price is. The more you do it, the more efficient you become,” Isong stated.
On how marketers were sourcing forex for imports, the MOMAN officials’ dealers were accessing the foreign exchange from banks and other sources.
“People access forex from different places. Just that it is easier for some people than others. Some people have strong banks, while others have other means of accessing forex. So everyone plays on their strength and ability to access forex.
“And it must be stated that the floating of the exchange rate is a plus, for instance, some people can go and get credits from their suppliers, while others have LCs (Letters of Credits), means of borrowing.
“But the most important thing is that there is a unified exchange rate and that makes people more confident in going to import. There is no unfair advantage, where in the past some persons have access to low exchange rates,” Isong stated.
Explaining what he meant by saying some dealers could get credit from suppliers, he said, “If you have a good relationship with your supplier, they can give you products on credit. It is a function of the relationship you have with your supplier.
“Obviously, the way the market works, if you have it on credit you pay a little bit more.”
Also speaking on the issue, the Secretary, IPMAN, Abuja-Suleja, Mohammed Shuaibu, stated that the cost of PMS was bound to go down in the coming weeks, as imports from marketers arrive in Nigeria.
He confirmed that some private depot owners were already cutting down the cost of the commodity, lower than the rate being sold by the NNPCL.
“The sector has been deregulated and, of course, if you have the power you will go and import. It is not going to be only the major marketers, independent marketers are also picking interest and there will be competition.
“And, of course, I know that sooner than later, the price of petrol will be forced down, particularly once the products from marketers start hitting the country from next week. This is because market forces will now determine the price.
“It is not going to be solely imported by NNPCL again, for instance, this week; the private depots reduced their prices, different from what NNPCL is selling. So there is a reduction lower than what NNPC is selling,” he stated.
Shuaibu said IPMAN was ready to compete with the NNPCL and major marketers to force down the cost of petrol nationwide.
“With time there will be healthy competition. We know major marketers are expecting products in weeks and we will compete with them when our products start coming. This will further reduce petrol price,” he stated.
The IPMAN official also noted that the consumption of petrol had dropped, as the purchasing power of citizens to access the commodity had reduced.
“People are lamenting. The price was raised by over three times its previous cost, coupled with the economic crisis in the country. So the patronage has been very, very poor,” he stated.
Last month, the Chief Executive, Nigeria Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, said some newly licensed importers of petrol were expecting their cargoes in July.