Naira's Fall: New Petrol Price Likely as Marketers' Fuel Cargoes Arrive July, NNPC Cuts Imports
- New oil marketers' petrol cargoes will arrive in Nigeria by July as NNPC reduces importation.
- The announcement was made by the Chief Executive of NMDPRA, Farouk Ahmed
- He said the agency had granted new licenses to importers to bring petrol.
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On Wednesday, June 14, 2023, the Nigerian government confirmed that other marketers have joined in the import of petrol following the removal of the petrol subsidy.
The federal government revealed that about three mega oil marketers expect petrol cargoes in July, while others have asked for licences to import the product.
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NNPC to reduce petrol imports, other marketers enter
The development comes as the Nigerian National Petroleum Company Limited (NNPC), the product's sole importer, reduced petrol imports following the deregulation of the downstream sector.
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However, the Natural Oil and Gas Suppliers Association of Nigeria expressed optimism that the new foreign exchange policy of the Central Bank of Nigeria (CBN), as implemented by commercial banks on Wednesday, June 14, 2023, could reduce the petrol price.
The Chief Executive of Nigeria Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, stated that some recently licensed marketers expect their products in July.
Ahmed said:
"NNPCL is slowing down on their importation, so we have to have someone closing up on that gap that NNPCL is creating not to have a shortage in the country. But NNPCL is also monitoring the replacements that they have. We agreed that NNPCL will continue to import until such a time when we have a critical mass of other importers.
"On licences, of course, we are processing them. About two or three marketing companies came to us last week to say they have already booked cargo to come in July. So these are some exciting propositions we have received."
According to Ahmed, the agency was fast-tracking licenses to other petrol importers and intersecting daily with the NNPC to ensure the market was saturated and well supplied and there was no gap.
Punch reports that the NMDPRA helmsman said the market was already deregulated, and there was no need to subsidize foreign exchange.
NNPC already factored new foreign exchange into the price
He said that the NNPC's new price factored that the exchange rate could rally at N650 per dollar, stating that the price would improve if the naira appreciates.
The development comes as the naira exchanged for N702 to a dollar at the Importers and Exporters (I&E) window on Thursday, June 15, 2023, as the CBN floated the local currency.
Naira depreciation to cause a hike in price
Vanguard reports that the naira depreciated by 5.75% compared to the N664 per dollar it exchanged on Wednesday, June 13, 2023.
The naira fell as low as N791 to a dollar before settling at N702.19.
The collapse of the local currency, caused by its devaluation by the CBN, has fueled fear of possible petrol price increases as marketers jostle to close the gap between the naira and the dollar.
There are speculations that the new FX policy could drive the pump price of petrol to N800 per litre.
FG’s new exchange rate policy to drive up petrol price to N800 per litre, experts say
Legit.ng earlier reported that the naira float introduced by the Central Bank of Nigeria (CBN), aiming to unify Nigeria’s exchange rate, will force a petrol price review, which the Nigerian National Petroleum Company Limited (NNPCL) currently pegged at N488 per litre for its retail outlets in Lagos.
Outside Lagos, the price of petrol is forecasted to sell at N650 per litre.
NNPC issued a petrol price guidance for its retail outlets, which other marketers quickly adopted.
Source: Legit.ng
