Marketers of petroleum products in Nigeria have placed embargo on importation of Premium Motor Spirit (PMS) also known as petrol, leaving the Nigerian National Petroleum Corporation (NNPC) as the sole importer of the product.

Nigeria consumes over 35 million litres of fuel daily. Investigations by New Telegraph showed that the development, which was made formal yesterday, has also led depot owners and marketers to begin the sale of petrol above N133.28 per litre ex-depot price.

The pricing template by marketers, seen by this newspaper, showed that some depot owners have disregarded the Petroleum Products Pricing Regulatory Agency (PPPRA’s) ex depot price mark.

MRS, our investigation showed yesterday, was selling at 135.50k, Hyden N137.50k; Fatgbems, N136.50k; Folawiyo, N 137; and Capital Oil at N137.

Others are D. Jones, which was selling at N136.50; Aiteo N137.50 and Nipco at N133.28. Besides this, the situation has also swiftly thrown up long queues of trucks along Ijora-Apapa, and fully turned survival of depots at dockyard and private depots in Apapa on full time throughput from the NNPC.

Throughput is a downstream contractual term used where imported products are discharged, stored and loaded at a third party jetty, depots and loading gantries.

While the rising debts of about $1 billion, which the marketers owe banks continue to go bad, checks by this newspaper revealed that members of Depot and Petroleum Products Marketers Association (DAPPMA) alone had over 60 per cent of the liability.

Executive Secretary, DAPPMA, Olufemi Adewole, yesterday, confirmed the debts profile of his association to banks, maintaining that over N660 billion debt owed marketers by the Federal Government for imported fuel and interest on bank loans had been major hindrance to petroleum importation into the country.

Most marketers, Adewole maintained, had stopped importing product due to inability to access foreign exchange and government’s refusal to pay outstanding debt owed. According to him, marketers owe some Nigerian banks over $1 billion, which they took as loans to import fuel.

“And because the government couldn’t pay them or pay the banks’ interest on the loans as agreed, the interest accumulated over time,” he said.

The main debt, which the government owes members of DAPPMA, Adewole stated, is over N500 billion, while interest on loans is over N160 billion.

“The inability to pay or service the loans has not only stalled their further importation of fuel, but is threatening the operation of the affected banks and the nation’s financial industry at large,” he said, adding, “foreign exchange remains another big challenge, we don’t have forex to import the product, except we are able to get adequate foreign exchange.”

“For now, landing cost on petrol stood at over N145 due to high forex rate which posed serious concern to marketers on the price to sell the product,” he added.

The queue at the Apapa depot, he said, was due to marketers’ inability to import petrol, adding that the current marketer dynamics made it difficult for marketers to import.

Confirming the news published by New Telegraph recently, the DAPPMA executive secretary said that the fuel landing cost had soared far above N145 per litre.

“The marketers depend on NNPC’s imported petrol cargoes. We buy from NNPC and our selling price will depend on the price given to us.

The huge debt owed marketers had eluded our operating fund. We are appealing to government to urgently pay outstanding debt, which is long overdue.

“Our banks are threatening to debit our account at the current rate at which forex is being sold at N360 per dollar as against N197 per dollar that government allocated importation to marketers.

This means that we are the ones subsidising the imports. “If government failed to address these lingering challenges on price differential, it is not only marketers that will go down, the banks will also collapse because our exposure with banks is in excess of $1.95 billion,” he noted.

Currently, it is not profitable for marketers to, according to Adewole, import petrol due to forex challenges and high landing cost, which makes few marketers sell above exdepot price of N133.28.

He urged government to provide adequate forex for marketers to import product and sell at the rate that will make marketers sell at N145.

New Telegraph