Just In: Depots deserted as petrol landing cost hits N720/litre

Many petroleum products depots are currently deserted due to lack of products caused by foreign exchange rate volatility, as the landing cost of Premium Motor Spirit, popularly called petrol, has increased to N720/litre, oil marketers said on Thursday.

Petroleum products’ dealers also stated that filling stations were shutting down daily in large numbers, as it was becoming increasingly tough to run the business. They said this could lead to widespread fuel scarcity in coming months.

It was further gathered that the landing cost of PMS into Nigeria had increased to N720/litre, up from N651/litre in August this year.

Speaking at the National Executive Council meeting of the Natural Oil and Gas Suppliers Association of Nigeria, in Abuja on Thursday, the National President, NOGASA, Benneth Korie, said a lot of depots were presently dried up or out of stock.

He said, “Depot owners are so terribly affected by the increasing cost of crude oil and exchange rate, to the extent that many depots are practically deserted as their owners are unable to secure bank loans to fund their business due to high-interest rates.

“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 added, “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.

“As of today, filling stations are shutting down in great numbers on a daily basis and dealers are going out of business, with many more on the verge of bankruptcy because of their inability to secure funds to facilitate orders for their stations.”

Korie said the government must therefore urgently come to the aid of the industry as quickly as possible to save it from an impending colossal collapse, which would result in a more devastating blow to the economy at large.

N720/litre landing cost

The PUNCH further gathered that the landing cost of petrol has risen to N720/litre from N651 in August.

The Chief Executive Officer, PETROCAM Trading (Nig) Ltd., Patrick Ilo, during an interview session with The PUNCH, said 52,000 metric tonnes of petrol imported by the company on Tuesday was already N720/litre without subsidies.

According to him, if the landing cost was already N720, the pump price should be around N729/litre in Lagos State if the Federal Government had truly stopped subsidising the product.

“This is the second time I am bringing in my vessel. But after bringing it in, I am trapped. I can’t sell it because I landed my own product at N720. And if you add transportation from depot to station, the value today should be N729/litre at the pump.”

He blamed the price hike on high foreign exchange rate, adding that the Federal Government was still subsidising petrol through the Nigerian National Petroleum Company Limited.

The foreign exchange rate of the Central Bank of Nigeria as of Wednesday was around N766/$1, while it hovered around N990/$ at the parallel market.

He said.”Yes, PETROCAM has an import license, and we have products in Nigeria. I want to say this out loud that I brought (in product) 52,000 metric tonnes of PMS today, which I borrowed about sixty-something million dollars to import.

“But I cannot sell. Why? Because of the price NNPC is selling. NNPC to my mind, they are still subsidising. NNPC is quietly subsidising the market. And I don’t blame the government. It is when we have a stable government that there could be prosperity.”

Ilo added, “As of today, NNPC is subsidizing these products. And I’m talking about a subsidy of more than N100/litre. Because if you need to sell today, I landed my own product at N720. So how do you look at it? You look at it from the perspective of how much is diesel”