fuel station

Renewed Shege: Marketers Project N700/litre Petrol In Northern Nigeria

Fuel Price in Nigeria

According to oil marketers, starting in July, the price of petrol at the pump in Northern Nigeria could exceed N700 per litre.

When independent marketers begin importing goods in July, according to Mike Osatuyi, National Controller Operations for the Independent Petroleum Marketers Association of Nigeria, prices in the north may soar above N700.

While residents of the northern states may spend as much as N700 or more for one litre of petrol, those residing outside of Lagos should plan to pay about N610, while Lagos residents will pay about N600 per litre.

According to the currency rate, the current price of crude on the worldwide market, and the landing fee, what I am seeing is between N600 and N600+. The cost will be roughly N600 for those in Lagos, N600 extra for those outside of Lagos, and N700 or more for those in the north, according to him.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority is still issuing licences to businesses seeking to engage in the importation business as the downstream sector waits for new petroleum products.

The NMDPRA is now licencing additional importers, according to Olufemi Adewole, Executive Secretary of the Depot and Petroleum Products Marketers Association of Nigeria, who spoke with The Punch on Tuesday.

He stated that preparations for fresh items starting in July were well under way and added that product prices would be based on market factors.

“From whence do nations like Ghana, Benin, and Cameroon obtain their goods? Is it not from Nigeria? He questioned this with regard to goods that were being smuggled out of Nigeria and into nearby nations.

“Product prices will be determined by market realities, and the Nigeria Customs Service is now delaying some AGO (diesel) tankers due to the 7.5% VAT.

Remember that all expenses incurred by marketers will be added to the pump price after the landing cost. Because they must turn a profit, the marketer would also need to add profit, he said.

In a conversation on Monday, Tunji Oyebanji, the chief executive officer and chairman of 11 Plc and a former chairman of the Major Oil Marketers Association of Nigeria, advised consumers to anticipate new pump rates that are comparable to those of diesel and other neighbouring African nations that import gasoline.

According to research done by The Punch, the cost of one litre of petrol in Ghana, Cameroon, and Benin as of June 19 was already higher than N800 a litre.

In Nigeria, the price of petrol is currently N495 and over, and that of diesel is close to N800.

“The reality is that you may get an indication of what the price will probably be after businesses start importing if you look at the costs of other West African countries that also import petrol. We are not there yet if the price we are paying now is not even close to theirs. The cost of diesel at the moment needs to be another metric, he added.
However, Oyebanji also mentioned that the price can be decreased depending on the currency rate.

“The simple line is that there will be a price change. Yes, depending on the exchange rate, it might increase right now or decrease. The upside is that since products would be available everywhere, you would be forced to lower prices if yours were higher than those of the gas stations nearby so that people would come and buy. The market would benefit from healthy competition, he said.

Osatuyi had earlier called the present price of fuel a “transitional price” in a conversation with The Punch. He had also said that marketers were anticipating a roadmap from the Federal Government after the elimination of subsidies.

“After the discussion with labour, we anticipate the Federal Government’s strategy. According to Labour, they will give the administration two months to develop the strategy. Additionally, we anticipate a roadmap for expanding the use of compressed natural gas.

“Three marketers have already indicated that they will begin importing products in July. We would then be aware of the true cost of goods because it would undoubtedly rise at that point. This current price is really a temporary price, he explained.

Since May 29, when the Federal Government made its official announcement regarding the deregulation of the downstream market, the price of petrol has skyrocketed above N490 per litre at stations affiliated with the Major Oil Marketers Association of Nigeria and above N500 at IPMAN outlets nationwide.

Marketers were still loading goods at the N496 per litre price set by government regulation, according to the chairman of IPMAN Satellite Depot, who spoke to The Punch.

We are loading products at the government price of N496.50 a litre because they are now available in the nation. But due to the central bank’s new foreign exchange strategy, the naira has surged to almost N765 per $1. We won’t know the full extent to which the new policy will impact our business until new products begin to arrive,” he said.

Additionally, Oyebanji made the suggestion that depot owners are now using both domestic and foreign loans to finance importation.

“It’s not like we’re just receiving licences for imports. Even though we have a licence, we no longer import because it is no longer profitable.

“Everyone is trying to figure out what we can do right now. Some people gather funds and take out loans from abroad, while others use local banks. Not just three businesses would be importing; several businesses are presently scrambling to begin bringing in goods. However, we won’t be yelling about it on newspaper front pages,” he stated.

The event follows a report by Reuters that black market fuel merchants and commercial drivers in Cameroon, Benin, and Togo had experienced business failure due to inadequate supply and high costs after Nigeria eliminated fuel subsidies.

“Queues have started forming at official petrol stations in Cotonou, the commercial city of Benin, which is around 60 kilometres from Nigeria. Some have been unable to keep up with the unexpected increase in demand, particularly from “zemidjan,” the local term for motorbike taxis.

A JNP petrol station employee who went by the first name Janvier said, “Before, we were selling about 2,000 litres per day, but now we’re selling up to 7,000 litres per day.” He had just turned away four clients due to a shortage of stock.