Gas stations across the country are now rationing petrol as fuel traders hesitate to import.
Though the recent spike in fuel pump prices led to decreased consumption and fewer queues, some cities, especially Lagos, are witnessing mild lines. These queues are expected to grow due to current rationing.
Most Lagos fuel stations have limited their operating hours for over a week. The initial reason given was the anticipated price hike, which the Nigerian National Petroleum Corporation Limited (NNPCL) refuted. Rumors also spread about a potential reintroduction of subsidies to offset the high petrol prices.
An insider hinted at the government considering this subsidy to ease the increased living costs due to rising fuel prices. This seems to be the government’s only option since they cannot control global oil prices, affecting the cost of imported refined products.
A trusted source confirmed fuel depots might be running low, and the difficulties seen by drivers at gas stations reflect this situation.
“Marketers aren’t importing. The landing cost surpasses the current ex-depot price, and obtaining foreign currency is tough,” she pointed out.
She added that unresolved pricing issues with NNPCL and their decision to set prices for traders goes against deregulation and competition principles. If exchange rate issues persist, petrol prices will keep climbing.
Major fuel marketers, who resumed petrol imports after subsidy removal, are thinking of cutting back. An unfavorable exchange rate has made the venture unprofitable.
Last month, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) stated that marketers began importing petrol. Earlier, only the NNPCL managed imports.
During a Lagos event, NMDPRA’s CEO, Farouk Ahmed, said out of 56 applicants, 10 were serious, and three had already imported. The trio were A.Y. Ashafa, Prudent, and Emadeb. Others were set to start soon.
Ahmed highlighted the government’s commitment to the Petroleum Industry Act (PIA) deregulation and addressing importation challenges.
Recently, oil marketers have asked the government to tackle security issues and temporarily halt the 7.5% VAT on diesel to enhance the downstream sector’s operations.