Lagos, October 9 – Nigeria’s national oil firm, NNPC Ltd, has resumed its role as the sole importer of petrol due to the inability of local private companies to secure foreign currency, according to its chief executive. This development comes four months after the opening of petrol imports to private entities.
Thank you for reading this post, don't forget to subscribe!Mele Kyari, NNPC’s CEO, clarified that the government had not reintroduced the decades-old petrol subsidy, which was abolished at the end of May. This assurance comes despite concerns among investors that pump prices have remained stagnant since July, even with a more than 30% increase in oil prices.
Nigeria, Africa’s largest oil exporter, relies heavily on fuel imports as its refining capacity falls short of meeting the demands of its 200 million citizens. In recent years, the country has exchanged crude oil for fuel, resulting in a scarcity of U.S. dollars.
The decision to allow private sector participation in petrol imports was part of President Bola Tinubu’s reform efforts to eliminate fuel subsidies. While some fuel companies initially engaged in imports starting in July, Kyari disclosed that they are now encountering difficulties in obtaining foreign currency for importing petrol, commonly known as premium motor spirit (PMS).
“We are the only company importing PMS into the country,” Kyari stated during an energy conference. Addressing concerns about the reestablishment of a partial fuel subsidy, he emphasized, “We are recovering our full cost from the products that we import. No subsidy whatsoever.”
Petrol is widely used in Nigerian households and small businesses to power generators, given that a significant portion of the population lacks access to the national electricity grid.
Nigeria is currently grappling with foreign currency shortages, leading to the devaluation of the naira to record lows in the parallel market. The new central bank governor has acknowledged a backlog of nearly $7 billion in foreign exchange demand faced by policymakers.
