Fuel Scarcity: Forex Crisis, Illegal Levies Hindering PMS Supply – Marketers
The Depots and Petroleum Products’ Marketers Association of Nigeria has revealed that unauthorised fees, levies and inability to access foreign exchange by dealers, are the issues hindering the supply and distribution of Premium Motor Spirit popularly known as petrol or fuel.
DAPPMAN Chairman, Winifred Akpani, in an interview with The PUNCH said, the burden of sourcing forex through the parallel market for transactions domiciled in Nigeria had left petroleum marketers in “dire straits.”
“Accessing dollars for operations has been an insurmountable hurdle for petroleum marketers. The difference between the Central Bank of Nigeria exchange rate and the parallel market exchange rate continues to get wider by the day,” she said.
Akpani noted that in addition to core operational expenses that were denominated in dollars, petroleum marketers were also contending with sourcing funds from the parallel market to pay for fees and levies that were charged in dollars.
She said, “For example, to charter a vessel to convey 20,000 metric tonnes of PMS within Nigeria for 10 days, freight charges are denominated in dollars, that comes to about N220m at the official forex rate of N440, and a whooping N440m for petroleum marketers who have to source forex from the parallel market at N880.
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“This implies an additional cost of N11 per litre for this transaction due to the forex official/parallel market differential.”
She stated that for the same transaction, jetty fees, also charged in dollars, amount to N15m at the official forex rates and N31m for petroleum marketers who source from the parallel market.
She said jetty berth was charged in dollars and amount to N2.2m at official forex rate, and N4.4 million at the parallel market rate.
Akpani said port dues were charged in dollars by the Nigerian Ports Authority and Nigerian Maritime Administration and Safety Agency, as she put the amount at N71.5m at the official foreign exchange rate and N143m for marketers who source forex from the parallel market.
On unathorised fees and levies, Akpani said marketers had to pay between N10,000 and N15,000 at toll gates erected at borders before tanker drivers could be allowed to deliver petroleum products to each state of the federation.
She also listed different union charges as part of the unauthorised fees and levies the marketers had been made to pay for over the years.
Akpani called on the government to establish a level playing field in the sector by giving petroleum marketers access to forex at the CBN exchange rate.
“This is a passionate appeal to the government as we can confidently state that accessing forex through the CBN window will significantly enhance capacity and facilitate seamless supply of PMS and birth a regime of sustainability in terms of storage, distribution and supply across the nation,” she added.
The Nigerian National Petroleum Company Limited, which serves as supplier of last resort, is now the major company that has full access to the dollar at the official rate.
Other independent marketers have to source for forex at the black market. The NNPC also has access to products through swap arrangements.
Akpani decried the absence of a level-playing field that guarantees access to forex for all marketers at official rates, noting that having NNPC as the sole importer of PMS was not sustainable, considering the huge consumption of the product.
Source: The Punch
