The Managing Director of Rainoil Logistics, Dr. Jude Nwaulune, has stated the current foreign exchange crisis is a major factor that contributes to the product’s anticipated landing cost for the Calabar region currently being around N580 per liter.
According to The PUNCH, operators have stated that challenges in the local distribution channel and the ongoing foreign exchange crisis are driving up the price of Premium Motor Spirit, or petrol, raising concerns about the current state of the downstream industry in the country.
He revealed this at a panel discussion with the topic “Africa Fuels Update: Overview of Trends and Market Developments” at the recently organised Oil Trading and Logistics Africa Week 2023 in Lagos.
According to Nwaulune, “The realities have been alluded to from the FX perspective, sourcing primarily from the parallel market, which is a necessity for most marketers.
“According to an analysis of our operating bases, a litre of PMS lands in Lagos for about N565. It costs about N570 per liter as we head towards the Oghara region and perhaps N580 per litre as we get into the Calabar area.
Rainoil’s boss emphasized that since fuel subsidies were removed and the foreign exchange crisis emerged, independent marketers have had difficulty breaking even in their business ventures.
Since most independent retailers are currently having financial difficulties, the product is becoming increasingly scarce. The cost of transport has gone up down the supply chain as well, with diesel selling at around N1, 000 per liter.
Speaking about the shift to greener energy, Nwaulune advocated for more funding for CNG and other cleaner fuels, because the nation has chosen petrol as its transitional fuel.
He recommended that in order to stimulate the economy, stakeholders increase their investments, considering the sizeable proven gas reserves.
He also called on the government to confront the many issues the country faces, such as asset vandalism, community discontent, and insecurity. Although some of these difficulties are being addressed by the Petroleum Industry Bill, potential investors are still hindered by the concern over the integrity of contracts.
In light of the country’s present economic data, he also urged the government to ban all local transactions valued in US dollars, claiming that doing so would promote industry expansion.
