Forex Scarcity: NNPC Remains Major Fuel Importer

Nigerian petrol station

Despite the increase in pump price of premium motor spirit (PMS) or petrol to N145 per litre from N87, the Nigerian National Petroleum Corporation (NNPC) still retains its status as the sole importer of the product, the Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN), Mr. Obafemi Olawore has said.

He spoke on the sideline of the inauguration of four PMS storage tanks at Mosimi depot in Ogun State.

He said marketers were shunning importation because of the inaccessibility of foreign exchange (forex), leaving the responsibility of importation for NNPC alone.

Olawore said: “The truth is that NNPC is importing more than anybody because it has easier access to forex than everybody. Our intention is that once the sector is fully deregulated, we will increase our importation. They (government) only increased the price of petrol and that is not deregulation. You don’t deregulate with fixed price, you allow the price to float. Even though we see some floating of prices as some people sell below the N145 per litre price band, you have to verify if the quantity delivered and quality delivered are satisfactory. The DPR has to do that or you also can check fuel outlets, as a consumer, to know if you buy fuel that will knock your engine.

“Frankly, we are hampered by unavailability of forex. The fuel we are importing is through the intervention of the Minister of State for Petroleum Resources who has kindly agreed with the international oil companies (IOCs) to give us forex. I can only speak on allocation but not on the actual importation.”

Speaking on the reconstructed and rehabilitated storage tanks in Mosimi, the Group Managing Director of NNPC, Dr Maikanti Baru said rehabilitation of tanks 11, 12, 13 & 22 at the depot, by Messrs. Adano Engineering Company Nigeria Limited, fits into one of NNPC’s 12 key business focus areas, the restoration of oil and gas infrastructure.

Baru said: “It is pertinent to point out that this project has not only restored the original combined storage capacity of 87.70 million litres for the four tanks, but also increased it by 220,000 litres. This combined storage capacity represents over 54 per cent of the total storage capacity for PMS otherwise known as petrol at Mosimi depot and has significantly enhanced strategic storage capacity of PMS nationwide.

“It is noteworthy that the completion of these tanks and the gauging/metering technology adopted has underscored some of the corporation’s key business focus areas namely: reduce waste and stop leakages; push for best practice efficiency in operations; drive delivery and execution; and maximise profitability.”

The NNPC chief further said: “We wish to recall that Mosimi depot was constructed in 1978 for the storage and distribution of petroleum products to the western part of the country. Unfortunately, tank 13 was gutted by fire in 1997; while tanks 11, 12 and 22 have worked satisfactorily for 23 years but their respective floating roofs collapsed at different times in 2001 which made them unserviceable.

‘’The non-usage of these decrepit tanks imposed operational constraints to products storage and distribution in Mosimi area which in turn negatively impacted on the turnaround time of product vessels at Atlas Cove Jetty with concomitant huge demurrage charges to NNPC operations.

“It, therefore, became necessary that tank 13 should be reconstructed and tanks 11, 12 & 22 be rehabilitated to restore the operational capacity of Mosimi depot and overall profitability of the corporation.”

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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