Fuel marketers in Nigeria are growing increasingly concerned about their ability to import petrol due to a shortage of US dollars in the country. Despite the deregulation of the downstream sector, worries persist that Nigeria may experience fuel scarcity once again.
Expectations were high when oil marketers advocated for the removal of fuel subsidies and the deregulation of the downstream sector. Many hoped that this deregulation would break the monopoly of the Nigerian National Petroleum Company Limited (NNPCL) in petrol importation and end the recurring scarcity of the product in Nigeria.
However, months after President Bola Tinubu announced the end of fuel subsidies on May 29, the NNPCL continues to be the sole importer of petrol, maintaining its monopoly in the downstream sector. This situation has undermined the deregulation of the sector, allowing the NNPCL to fix prices and leaving the country susceptible to fuel shortages.
According to the National Controller Operations of the Independent Petroleum Marketers Association of Nigeria, the main reason independent oil marketers are not importing petrol is the scarcity of foreign exchange (forex) and the rising international price of crude oil. The high cost and forex challenges have made petrol importation unsustainable for many.
The rise in crude oil prices to $94.95 per barrel and the exchange rate of 985 Naira to the US dollar in the alternative market have added to the difficulties faced by marketers.
Emadeb Energy’s CEO, Adebowale Olujimi, emphasized the unsustainability of petrol importation and the need to revive local refineries as a way forward.
Although the NNPCL had indicated a reduction in fuel imports as of August when the Dangote Refinery was expected to begin operations, some sources suggest that the Dangote Refinery’s actual production date remains uncertain.
In this context, fuel marketers’ ability to import petrol is uncertain, and the country may continue to rely on the NNPCL for its supply. The scarcity of forex and rising oil prices are contributing to these challenges, and there are concerns about the potential resurgence of fuel scarcity in Nigeria.
While Dangote Refinery is seen as a potential solution to Nigeria’s fuel supply challenges, its exact commencement date remains uncertain, and other local refineries may need attention to ensure stable petrol supply in the country.