News made the rounds this morning that the NNPC had conceded that the current pump price of petrol of N145 per litre was no longer sustainable. The Group General Manager, Crude Oil Marketing, NNPC, Mr. Mele Kyari, stated this at this year’s Oil Trading and Logistics Expo, OTL, holding in Lagos.
This suggest that we might be in for another fuel price hike if the NNPC and other importers find their way.
So what is all this about? Here are
The current exchange rate makes it difficult for them to break-even
“We have a very difficult business environment. It is impossible today to import products at the current market price, at current fixed foreign exchange, FOREX rate.
‘’There is no way today you can take products to retailers and sell at N145. It is not possible. If that is true and I believe that it is, because we all go to the market.
There is FX but not enough to convince suppliers to import fuel
‘’That is why suppliers are not importing. It is not FX. We have created a niche market for the FX. I am part of the committee allocating FX. We gave FX. It was rejected. The reason being given is that FX is not enough to import. But that is not true.
“The truth is that marketers go back to the market and land it here, that you are required to sell it at N145 maximum. I am sure they won’t make it. We won’t let you do it today. That is the main reason people are not importing today. It is not FX,” he added.
‘’It is because they did not import. Somebody has taken the heat off the price. Because we (NNPC) have taken the heat, and you buy from us; you can afford to go to the market and then put a ridiculous price. It is not possible, because they did not import it. It is not FX,”
A call for fuel price increase might not fly
Why can’t we sell above N145? That is where legislation should come in.” “I also know today that it is impossible for this government to announce tomorrow that petrol is about N150. This government cannot sustain it. That is the truth. The people will not accept that figure.