Oil marketers blame NPA for high prices of AGO, Kerosene

The unyielding attitude of the Nigeria Ports Authority (NPA) not to allow oil marketing companies  pay their port charges in Naira instead of foreign currency on petroleum related products especially Automotive Gas Oil (AGO) or Diesel and Kerosene in Naira will continue to keep the prices of these commodities high, BusinessDay investigation has revealed.

The oil marketing companies who spoke to BusinessDay have alleged that the NPA has made it compulsory for them to pay the port charges in foreign currency as against their request to pay in Naira.

They said since the authority is not ready to consider the scarcity of dollars this time they would also not hesitate to pass the port charges over to consumers.

A marketer who is worried about the situation said “Can you imagine you having  the  Naira but searching for the dollar equivalent to pay NPA and you are not  going  to get  the  dollar at  interbank rate easily and immediately and this is  a payment  that you need  to make immediately so  that  your  vessels  would  come  in. If your vessel does not come in   immediately it would start accumulating  charges  for  demurrage”.

He raised the question whether NPA actually pay the government in dollars or in Naira and if  it is  naira at  what rate  is  it doing that. “We have raised this issue with the Minister of petroleum who promised  to get  in touch with  the minister of   transport. But the minister of Transport according to those that went to see him was said to have said he does not want  do anything about it but that the marketers should continue to pay in dollars”.

According to him, if marketers pay dollars  that they sourced from the  black market, it then becomes very clear  that the product  landing cost would be higher  than the actual landing  cost as approved by PPPRA. “So this a big challenge for us. We are not saying that  we would not  pay. But why do we pay in dollars.  We are not selling the product in dollars.  NPA is a Nigeria   agency  while the  consumers are paying  in Naira so why should we go and look for dollars and pay them”, he retorted.

He believed that the NPA officials collect dollars from marketers and remit to government in Naira at official exchange rate.

But in its response to BusinessDay inquiry, NPA said it is acting on behalf of the Federal Government of Nigeria, saying that if it acts contrary, it would be tantamount to criminal act. The tariff is law, it says.

Corporate Affairs Manager of NPA, Captain Iheanacho Ebubeogu urged the marketers to approach  the government if they want  the policy changed because it is  only  the Federal Government  that has the power to review the act.

He said nobody can alter the arrangement, not even the   managing director of the agency as that would amount insubordination.