Private investors are not eager to import the Premium Motor Spirit (PMS) despite the decline of the products following the fall of crude oil in the international market, The Nation learnt on Wednesday.
Besides, the source that spoke on the condition of anonymity because she is not authorized to speak on the matter, said sourcing for the foreign exchange is still pretty difficult for the private investors as the value of dollar has soared.
She depicted the announcement of Federal Government’s exit from the payment of subsidy on petrol as a welcome development.
She described whoever is doubting whether the government was paying any subsidy as ignorant of the crude oil market in view of the prices that prevailed at that time.
The source urged the Department of Petroleum Resource (DPR) and the Petroleum Products Regulatory Agency (PPPRA) monitor marketers’ compliance with the current pump price of petrol.
On why marketers are reluctant to import petrol, the reliable source said “the private depot owners have started making arrangements to import. The challenge is the provision of dollar.
“Once they (government) are issuing the dollar we will import. If I don’t import with the expectation that I will get dollar at N380 and I am now forced to pay N480, there is a huge difference between what I budget to import the product and what I am actually selling it.
“That is what has driven marketers away from importation. There was a time we were expecting we were going to net off at N198 and the government divided it to N285. Till date the government has not reimburse the marketers. With that debt still in ground, I don’t think any marketer will be too eager to go and add to the debt.”
Speaking with The Nation on phone, the Independent Petroleum Marketers Association of Nigeria (IPMAN) National Vice President, Alhaji Abubakar Maigandi, also cited the challenge of sourcing for forex wedging the marketers from importing petrol.
He agreed that the government was subsiding the price of petrol, adding that customers were not buying the product at its cost price.
According to him, “If NNPC says no subsidy, it is true because the prices of crude oil have gone down. The product we were selling at the rate of 145 per litre, if there was no subsidy, there was no way government could sell them at that rate.
When the prices for of crude oil go higher, automatically, the prices of white products also increase. It was supposed to be N230 or N250 per litre.
“The way the price of petrol is now, marketers can import and make their profit. The forex is the challenge since the exchange rate has gone higher. Till now, the private depots are yet to comply with the new pump price.”