MRC -- Nigeria's national oil firm NNPC Ltd has again become the sole importer of petrol because licensed local private firms are unable to obtain foreign currency, its chief executive said on Monday, four months after imports were opened up to private players, said Hydrocarbonprocessing.
Africa's largest oil exporter, Nigeria, imports nearly all its fuel as it does not refine nearly enough to meet the demand of its 200 million citizens. In recent years, it has swapped crude for fuel, depriving it of a source of U.S. dollars. Opening up petrol imports to the private sector was part of reforms by President Bola Tinubu to wean the country off decades-old fuel subsidies.
Some fuel companies began imports in July but Mele Kyari told an energy conference that they were now struggling to get foreign currencies to import petrol, known as premium motor spirit (PMS). "We are the only company importing PMS into the country," he said.
"None of them (fuel companies) can do it today. For them, access to foreign exchange is difficult. We create FX, therefore we have access to FX and their access to FX is limited." Petrol pump prices have not budged since July despite a more than 30% rise in oil prices, which has led to accusations that the government had reintroduced a partial subsidy.
Kyari did not directly respond to the accusation but said current prices showed that "the market is adjusting itself." Petrol is widely used by households and small businesses to power generators because millions of Nigerians are not connected to the national electricity grid.
Nigeria is in the grips of foreign currency shortages, which have seen the naira weaken to record lows on the parallel market. The new central bank governor has said that policymakers faced a nearly $7 billion backlog in foreign exchange demand.
We remind, Nigeria's average daily petrol consumption has fallen by 28% since President Bola Tinubu scrapped a popular but costly subsidy on the fuel at the end of May. Average daily petrol consumption fell to 48.43 million liters in June, down from the previous average of 66.9 million, according to figures released to Reuters by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).