Oil marketers have warned of an impending fuel scarcity in Nigeria as many petroleum product depots remain deserted due to a shortage of products attributed to foreign exchange rate instability. The landing cost of Premium Motor Spirit (PMS), commonly known as petrol, has surged to N720 per litre, according to reports.
Petroleum product dealers have highlighted the challenges they are facing, including the closure of filling stations, making it increasingly difficult to operate their businesses. This situation has raised concerns about a potential nationwide fuel scarcity in the coming months.
It has been revealed that the landing cost of PMS in Nigeria has risen to N720 per litre, up from N651 per litre in August of this year.
Speaking at the National Executive Council meeting of the Natural Oil and Gas Suppliers Association of Nigeria in Abuja, the National President of NOGASA, Benneth Korie, expressed the dire situation, stating that many depots are practically empty. He attributed this to depot owners’ inability to secure bank loans due to high-interest rates, which are driven by currency exchange rate volatility.
Korie emphasized, “Worst hit are filling stations whose owners find it extremely difficult to secure funds to procure products for their retail outlets. Both the independent and major marketers are so terribly affected.”
The CEO of PETROCAM Trading (Nig) Ltd., Patrick Ilo, also shared insights into the situation, revealing that 52,000 metric tonnes of petrol imported by his company was priced at N720 per litre without subsidies. He suggested that if the landing cost had reached N720, the pump price should be around N729 per litre in Lagos State if the Federal Government had indeed ceased subsidizing the product.
Ilo attributed the price increase to the high foreign exchange rate and suggested that the Federal Government was still subsidizing petrol through the Nigerian National Petroleum Company Limited (NNPC).
He mentioned, “As of today, NNPC is subsidising these products. And I’m talking about a subsidy of more than N100 per litre.”
This alarming situation has raised concerns about the potential for fuel shortages in Nigeria in the near future. Oil marketers and industry experts are calling for urgent government intervention to address the challenges posed by the volatile foreign exchange rate and ensure the stability of the petroleum product supply chain.