Oil price high as Nigerian government agencies charge traders in dollars

The fuel shortage in parts of the country, particularly Abuja and the surrounding area, has been linked to depot owners paying for logistics costs, including shipping, Nigerian Port Authority (NPA ) and Nigerian Maritime Administration and Safety Agency (NIMASA) fees in the United States. US dollars.

This forced traders to sell gasoline above the official price of N146, N147, and N148 per liter, as they sourced scarce foreign exchange on the black market to pay government agencies, Faruk Ahmed the new Managing Director of Nigerian Midstream and Downstream Petroleum Regulatory Authority told reporters Tuesday after a meeting with President Muhammadu Buhari in Abuja.

“They have to go to the black market to stock up on US dollars. And this differential between the official market and the black market that they buy is the reason why they added around N9 to N10 to N15 and it depends on whether you are Lagos, Calabar, Port Harcourt or Ogara, ”Mr. Ahmed said. .

“We had a meeting last Tuesday, the ninth and NPA was represented there and DG NIMASA was there too NNPC, the major traders were all there and we all agreed and resolved that the excess capacity of NNPC to ship their vessels will be chartered to all marketing companies will charge in naira so that NNPC will now seek the source to convert US dollars through CBN. ”

Fuel lines returned to Nigerian cities this month, with many motorists struggling to purchase petroleum products as many stations have been closed or partially operated. The scarcity arose amid reports of a likely increase in prices by traders. The NNPC denied that the government was planning a hike.

In Abuja, many residents said they relied on the black market for gasoline to power their cars and electricity generators.

In Kano, long lines have resurfaced at gas stations, with most gas stations closed. Only a few service stations sold gasoline at the government approved price of N 165 per liter.

In early November, the NNPC assured that there would be no rise in the price of oil, going further by saying that there was no need to panic buying.

READ ALSO: Nigeria to remove fuel subsidies; pay a transport allowance to “poor citizens”

A declaration by Garba Muhammad, group chief executive, Public Affairs Division, noted that more than 1.7 billion liters of gasoline were in stock and a larger supply was expected for delivery to the country within weeks and the coming months.

The head of the intermediate and downstream regulator, Mr Ahmed, said on Tuesday that there is an agreement regarding the NIMASA and NPA fees that fuel traders will contact their line ministry for instructions on receipt of fees in naira instead of dollars, adding that this commitment has already started.

The NNPC has converted to billing the naira rather than the dollar for chartering excess capacity to all marketing companies, Ahmed said.

“I think that with this, the owners of the depot will have no reason to increase their price beyond the official selling price of N148,” he said.



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