Marketers Blame Depot Managers for the Increase in Gas Price, Suggest Another Increase

Elder Chinedu Okoronkwo, the national president of IPMAN, has accused private depot operators of producing pricing distortion in the downstream oil industry.

Okoronkwo claimed that the current distortion in the price of Premium Motor Spirit, PMS, better known as Petrol, is caused by operators’ unilateral increases in the ex-depot price.

According to him, the depot operators would continue to distort market operations and attribute the problem to a lack of foreign currency unless the government steps in.

His response comes after Dame Winifred Akpani, the Chairman of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), blamed the severe cash scarcity in the official market, which has caused the naira to drop to N860 against the US dollar.

She claims that this has significantly changed the dynamics of gasoline importation, distribution, and marketing.

In order to improve the supply and distribution of gasoline across the country during the holiday season, Akpani, who made this announcement at a press conference held by its Governing Council in Lagos, urged the government to grant petroleum marketers access to foreign exchange at the CBN’s official rate.

She claims that among the problems making the importation and distribution of fuel difficult for members are a lack of foreign exchange coupled with a number of unauthorized taxes and terrible roads.

Akpani claimed that petroleum marketers were in “dire straits” as a result of having to get foreign exchange for transactions with a Nigerian domicile through the parallel market.

“Accessing USD (dollars) for our operations has been an insurmountable hurdle for petroleum marketers. The difference between CBN exchange rate and the Parallel market exchange rate continues to get wider by the day.

“For example, to charter a vessel to convey 20,000 MT of PMS within Nigeria for 10 days, freight charges are 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 from the parallel market at N880. This implies an additional cost of N11 per litre for this transaction due to the FX official/parallel market differential.

“DAPPMAN hereby calls on the government to establish a level playing field in the sector by giving petroleum marketers access to forex at the CBN exchange rate for their operations. 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 said.

Source: Oriental News Nigeria

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