FG Urged to Fine-tune FX Administration for Petrol Imports


Chineme Okafor in Abuja

A former Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), Mr. Reginald Stanley has said that the federal government’s foreign exchange facility for importation of petrol into the country was a good intervention in the downstream petroleum sector, but that its administration should be fine-tuned.

Speaking when he commissioned the new mega petrol service station built by Emadeb Energy Services in Abuja, Stanley advised that the government clear out certain administrative bottlenecks in providing forex to marketers. He said those bottlenecks were preventing its liberalisation of the sector from taking a full course.

According to him, when forex approved for marketers are delayed from getting to their banks to enable them open letters of credit for orders placed, the volatility associated with petrol importation will eventually affect the tonnage imported by marketers.

“The FX challenges are national whether you are manufacturing or importing, but the government has done very well by providing intervention forex for the downstream to make sure that it keeps running.

“The only little lacuna here is that the forex needs to be made to work. There is a little bit of administrative bottlenecks here and there that need to be untangled and as soon as you do that, it will work well. The intervention is great but the application has to be fine-tuned,” said Stanley.

“The way the forex is being given today, there is a timing issue. If you are given forex on a Monday and the price of PMS is $450 per tonne but that forex does not get into your account for letter of credits to be opened until Friday, it means there is a time difference of four days and unfortunately there is volatility in the market place because by Friday the price would have moved up to $500 and marketers will bring less quantity. That underpins why a good number of marketers are unable to import petrol.”

He said the opportunities in the country’s downstream petroleum sector has continued to grow, adding that investments have being upgraded to include mega, multifunctional service stations like that of Emadeb.

“This is not just a filling station but a mega station which is what I have always advocated. This is an integral part of the downstream development in Nigeria. We have had a proliferation of filling stations littered all over the place but abandoned.

“Mega filling stations are the roadmap to the future. For Emadeb, this is a very good move that comes at a very critical time when depots are gone and products are taken to the consumers with efficiency,” he stated.

He stated that the federal government’s decision to liberalise and put pump prices within N135 to N145 have engendered competition in the market and that operators would now have to be efficient to remain in business.

Speaking on the new outlet, the Managing Director of Emadeb Energy, Adebowale Olujimi said his firm was already building 10 of such new outlets across the country, with further plans to acquire some existing stations within the next 18 to 24 months