Petroleum product depots across Nigeria are experiencing a severe shortage of products due to fluctuations in foreign exchange rates, leading to a surge in the landing cost of Premium Motor Spirit (PMS), commonly known as petrol. The cost has risen to an alarming N720 per litre, according to statements made by oil marketers on Thursday.
This unprecedented situation has forced many filling stations to shut down, causing concerns of a looming fuel scarcity crisis in the coming months.
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The landing cost of PMS has climbed from N651 per litre in August this year to the current N720 per litre. This dramatic increase has put enormous pressure on the petroleum products industry, making it increasingly difficult for businesses to operate.
During 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 grave concerns about the state of depots, many of which are struggling due to the rising costs of crude oil and exchange rates. He pointed out that these depots are now virtually deserted as owners grapple with high-interest rates that prevent them from securing bank loans to sustain their operations.
Korie stated, “Banks are not willing to guarantee funds release to stakeholders as a result of the difficulty, instability, and galloping rates of foreign exchange and high cost of the dollar. Many depots are presently dried up or out of stock, and this is no gainsaying as it is evidently verifiable.”
He continued, “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.”
Korie called on the government to intervene urgently to prevent a catastrophic collapse of the industry, which could have devastating consequences for the nation’s economy.
Meanwhile, the Chief Executive Officer of PETROCAM Trading (Nig) Ltd., Patrick Ilo, revealed that the landing cost of petrol has reached N720 per litre without subsidies. He explained that if this cost is factored in, the pump price should be around N729 per litre in Lagos State.
Ilo attributed the price hike to the high foreign exchange rate and suggested that the Nigerian National Petroleum Company Limited (NNPC) is still subsidizing petrol. He emphasized the need for a stable government to achieve economic prosperity.
The current exchange rate of the Central Bank of Nigeria stands at around N766 per dollar, while the parallel market rate is approximately N990 per dollar.
In light of these developments, industry experts are closely monitoring the situation, and the government is under increasing pressure to take action to address the challenges facing the petroleum products sector.
