Fuel scarcity looms as landing cost of petrol hits N720/litre

Many petroleum product depots are currently deserted due to a lack of supplies caused by currency volatility, as the landing cost of Premium Motor Spirit, also known as petrol, has risen to N720 per litres, oil marketers have said.

Petroleum product dealers also indicated that filling stations were closing down in huge numbers on a daily basis because the industry was getting increasingly difficult to maintain. According to them, this could lead to widespread gasoline scarcity in the coming months.

It was also gathered that the cost of importing PMS into Nigeria has risen to N720 per litre, up from N651 per litre in August of this year.

Read also: Nigeria braces for fuel scarcity as NUPENG joins nationwide strike

Speaking at the National Executive Council meeting of the Natural Oil and Gas Suppliers Association of Nigeria in Abuja on Thursday, Benneth Korie, the National President of NOGASA, said many depots were either dry or out of stock.

He said, “Depot owners are so terribly affected by the increasing cost of crude oil and exchange rate, to the extent that many depots are practically deserted as their owners are unable to secure bank loans to fund their business due to high-interest rates.

“Banks are not willing to guarantee funds release to stakeholders as a result of the difficulty, instability and galloping rates of foreign exchange and high cost of the dollar. Many depots are presently dried up or out of stock, and this is no gainsaying as it is evidently verifiable.”

He added that the worst hit are filling stations whose owners find it difficult to secure funds to procure products for their retail outlets. “Both the independent and major marketers are so terribly affected.”

“As of today, filling stations are shutting down in great numbers on a daily basis and dealers are going out of business, with many more on the verge of bankruptcy because of their inability to secure funds to facilitate orders for their stations.

“The high dollar exchange rate against the naira rate was killing its businesses, requesting that foreign exchange for importing fuel should be pegged at N600 for the next three months,” he said.

The oil marketers noted that, while they had recently hailed the withdrawal of fuel subsidies, they had also warned and suggested that the necessary steps be taken to mitigate its repercussions for the survival of residents and companies.

Read also: Fuel scarcity is artificial, stop panic buying, says Consumer Protection Agency

NOGASA expressed worry about the mounting issues of petroleum product procurement and distribution, particularly the hardships caused by rises in petrol and diesel pump prices across the country.

According to Korie, the government must come to the industry’s help as soon as possible to save it from an oncoming collapse, which would result in a more devastating blow to the economy as a whole.