The Oil Marketers Association of Nigeria has blamed disruptions in downstream market operations on charges in foreign exchange by the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Ports Authority (NPA).
The Marketers have therefore asked the agencies to obey Federal Government’s directive on Naira transactions for ports charges.
Mahmood Tukur, Vice Chairman II, Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN), stated this on Sunday.
The federal gvernment through its downstream regulator, and based on agreement reached with stakeholders, directed ports charges to be collected in Naira.
The directives was contained in a communique issued in November 2021, and signed by heads of the Nigeria Midstream and Downstream Petroleum Regulation Authority, Nigeria National Petroleum Company Limited (NNPC Ltd), Major Oil Marketers Assocoation of Nigeria and DAPPMAN.
Tukur alleged that the agencies were yet to comply with directives and continue to collect charges in dollars.
“Government gave directives that these agencies should henceforth charge marketers in Naira, but that had not been implemented. That’s a major challenge.
“The dollar price is practically driven by demand, if there is no supply, obviously the price will rise. So, every time a vessel needs to berth, we have to pay ports charges in dollars.
“But we are saying that can be paid in Naira. That’s one way of actually taking demand (for dollars) out of the market and it will cool the FOREX effects.
“If these products are consume locally and destine for local ports, why is the NPA and NIMASA charging in dollars?
“They should simply implement a directive given by the government, and we can assure that this will also bring down the price of petroleum products,” Tukur said.
The statement also quoted the Chairman of the DAPPMAN, Winifred Akpani as saying that FOREX conundrum was affecting petroleum marketers.
She noted that to charter a vessel that could convey 20,000 metric tonnes of PMS within Nigeria for 10 days, freight charges are being denominated in dollars.
“That comes to about N220 million at official FOREX rate of N440, and a whooping N440 million for petroleum marketers who have to source FOREX in the parallel market at N880.
“This implies an additional cost of N11 per litre for this transaction due to the FOREX official/parallel market differential.
“For this same transaction, Jetty fees, again charged in dollars, comes to N15.4 million at official FOREX rate and N30.8 million for petroleum marketers who source from the parallel market.
“In the same vein, Jetty Berth is charged in dollars and comes to N2.2 million at official FOREX rate and N4.4 million at parallel market.
“Then there are port dues (NPA and NIMASA) charged in dollars, which come to N71.51 million at official FOREX rate and N142.796 million for marketers who source FOREX from the parallel market,” she said.
Akpani described the trend as “quite burdensome” which made operational expenses and procurement increasingly difficult for its members.
She stated that amid this inclement situation, petroleum marketers compete unfavourably with the NNPC which has upper advantage.
She said the NNPC, historically, the supplier of last resort currently served as the major oil downstream company in the country with the acquisition of OVH.
“Without a level-playing field, especially one that guarantees access to dollars for all marketers at official rate, marketers’ ability to import products is continually and severely hampered.
“As a significant portion of their operations and critical operational and capital expenses are denominated in dollars.
“Full availability of products, particularly PMS will experience a marked boost when access is granted to FOREX at official rate for all operators and subsidies removed completely.