Forex Row Threatens Fuel Supply, Price Stability

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The lingering row between private depot owners and the Federal Government over dollar payment of dues and levies is set to shatter the stability of fuel supply and price across the country this week.

This dollar payment is made by depot owners to ship owners who deliver the product to their facilities

Vanguard investigations reveal that despite the resolutions of a recent stakeholders meeting, private deport owners still pay charges and levies in dollars to relevant government agencies, a development that threatens the stability of supply and price of the product.

Given the scarcity of dollars in the country, the depot owners have to source for foreign exchange at a higher exchange rate, which translates to higher costs for them.

To address these challenges, the Nigerian National Petroleum Company, NNPC, Limited, Major Oil Marketers Association of Nigeria, MOMAN, and other stakeholders, at a recent meeting resolved, among other things, that relevant government agencies are to seek ways of addressing the challenges relating to dollar payment of levies and dues.

Specifically, in a communique signed by Engr. Farouk Ahmed, Nigeria Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, Engr. Yemi Adetunji, NNPC, Mr Clement Isong, Executive Secretary, MOMAN and Mr Olufemi Adewole, Executive Secretary DAPPMAN,, had stated: “The Nigerian National Petroleum Corporation, NNPC, assures the supply of sufficient PMS to the country.

“NNPC shall immediately revert to Naira denominated invoices for excess capacity for coastal movement for the time being.

“Nigerian Maritime Administration and Safety Agency, NIMASA and Nigerian Ports Authority, NPA are to engage their supervising Ministry and the CBN to seek ways of addressing the challenges relating to the payment of dues and levies in US Dollars.

“NMDPRA to engage stakeholders on the reconciliation of bridging claims. The Marketers/Depot Owners are to start charging the official ex-depot price immediately.

“NMDPR will engage stakeholders within the first quarter of 2022 on the implementation of guidelines and timelines of the Petroleum Industry Act, PIA in 2021.

“All stakeholders agreed to collaborate to ensure smooth and efficient supply and distribution of petroleum products to all parts of the country. MOMAN and DAPPMAN are to immediately communicate this resolution to marketers.”


However, the Independent Petroleum Marketers Association of Nigeria, IPMAN, insists that these resolutions are yet to be implemented and hence depot owners still charge N155 and N156 per litre, even though the NNPC depots sell it at N148.17 per litre.

Confirming this in a telephone interview with Vanguard, National Operations Controller, IPMAN, Mike Osatuyi, said it had become impossible for depot owners to deliver the product to them at the government-regulated price.

He said: “Today, we still get supply from depot owners, who pay their levies in dollars at between N155 and N156 per litre, even though the NNPC depots sell it at N148.17 per litre.

“Consequently, we are not able to guarantee the sale of the product at the regulated N162 per litre, due mainly to the problems associated with sourcing it. The situation could worsen if the issues are not addressed.”

‘FG to continue absorbing bridging cost’

However, the Chief Executive Officer (CEO) of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, Engr Farouk Ahmed, said the Federal Government would continue to pay the cost of bridging petrol to ensure its availability across the country.

Ahmed in a statement yesterday, explained that the authority will also offset all the bridging verified claims by all the stakeholders in the distribution of Premium Motor Spirit (petrol) in the country.

He assured petroleum tanker drivers and other stakeholders that the authority was determined to continue the payment of the bridging rate to ensure the effective distribution of products nationwide.

The CEO also revealed that the Nigerian National Petroleum Company, NNPC, Limited has stopped charging in dollars for their shipping services.

He also disclosed that both the Nigerian Ports Authority, NPA, and Nigerian Maritime Administration and Safety Agency, NIMASA, we’re expected to also begin to charge for their services in Naira very soon as the two agencies of government have started engaging the Ministry of Transportation to get the necessary approval.

Ahmed urged indebted marketers that collect bridging levies provided for in the pricing template to remit such deductions to enable the Authority to pay outstanding claims.

He had at the weekend, insisted that the current petrol pump price would remain for now with the expected high rate of travel during the festive period.

At present, petrol sells at N162/163 per litre in most major petrol stations with independent marketers selling at N165/litre.

He assured consumers that there would be no price increase in the immediate future.

“I will like to assure everybody that it is mere speculation. There will be no increase in the pump price, not in the near future.

“This is peak consumption period for Nigerians. Our focus must be on the average Nigerian who is on the street.”

– Vanguard

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