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Nigerians Should Prepare For The New Petrol Marketing Regime.

Nigerians Should Prepare For The New Petrol Marketing Regime.

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IPMAN

First Import After Subsidy Removal To Land Mid-July

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has urged Nigerians to prepare for a new marketing regime of Premium Motor Spirit (PMS), petrol or fuel.

It stated that the new regime would be characterised by price fluctuations dependent on the exchange rate and the price of crude.

In an interview with New Telegraph over the weekend, IPMAN National Operations Controller, Mr Mike Osatuyi, also said the pump price of petrol would be determined by market forces or fundamentals, as the downstream sector has been fully deregulated.

He explained that the high cost of foreign exchange and the high price of crude would result in high pump prices and vice versa.

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He also revealed that there has not been any importation of petrol into Nigeria since the announcement of the withdrawal of the petrol subsidy by President Bola Tinubu.

He said they currently sell old stock, adding that new stock may land in the country about mid-July 2023. Osatuyi said: “Nigerians should brace for a new regime of petrol marketing. The price can be up or down. It is not constant. It will fluctuate because of fluctuations in foreign exchange and crude prices.

First Import After Subsidy Removal To Land Mid-July

“When forex is reducing and crude price is reducing, we will have a reduction in the price of petrol and vice versa. If there is a low-price forex exchange, definitely, Nigeria will not have much revenue from crude sales.

“From July, those who have been licensed will bring in products into the country. We are going to a different regime for petrol marketing entirely, in the sourcing, storage and distribution, even in dispensing, because we are now working on a single foreign exchange rate. There are no more dual rates.

Everybody is now buying from the same market regarding foreign exchange. “The crude price is fluctuating; nobody can influence it. There is now an open field for everybody to operate. Knowing fully well that many days ago, the forex was selling for N780/$1.

“That means that if you were sourcing it from any bank in Nigeria, you would buy at the range of about N771 depending on the day the person buys forex.

That means we should expect an increase in price in July because this differs from when we bought at N740 0r N745 or when some people were swapping or trading by barter. We have now moved into a regime with no importation monopoly.”

He added: “The field is open now for all the players to display their efficiency, and where customers will benefit most is in the service. We should expect the price range of N600 in Lagos axis from the middle of July when new imports will come in.

“And as you are going upland, it will increase because of the transport element. You can not expect anything less than N700 in Maiduguri or Sokoto. Abuja can expect N650 because of the distance. But far coastline areas will get it for N610 or N615.

“But at the same time, when the crude price comes down and when the exchange rate comes down to maybe N600/$1 in the forex market, the pump price will definitely come down also. It is not a matter of being pessimistic; it is a matter of market fundamentals, which nobody can tamper with.

NBA -SBL 2023
NBA -SBL 2023

“The stock we have now, which we are dispensing, is old. Nobody can tell you that he has brought one litre of petrol into the country. We are still selling old stock, maybe the one Nigerian National Petroleum Company Limited (NNPCL) brought in.

“Maybe the new stock is still in the ocean or high sea. That old stock we are dispensing now has limited days that it will get exhausted. We must now settle down for the new import. The new import will land at a different price. So the current price is transitional from the old regime to the new regime.”

“Since the withdrawal of the subsidy, nobody has brought in any litre of petrol under this regime. NNPCL can not say it has imported fuel into the country. They said they have 40 days of stock sufficiency. Some new marketers have just been issued licences.

“And the subsidy removal was a month on June 29, so we have the stock that may last till July 10 or July 15; to serve the nation before the arrival of new stock, which will come with a new price that can be higher or lower.

But based on today’s figures and calculations, it can not come down from what we are buying today,” Osatuyi said.


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