Fuel scarcity in Nigeria is set to worsen as 86 oil trading companies have reportedly surrendered their permits to import Premium Motor Spirit (PMS), commonly known as petrol.
This development, caused by the country’s deteriorating foreign exchange crisis, could lead to longer queues at filling stations, particularly in Lagos and Abuja.
Mr. Farouk Ahmed, the Chief Executive of the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA), made this revelation during the Oil Trading Logistics (OTL) Africa Week 2023 conference in Lagos, themed ‘Energy, Synergy, and New Beginnings.’
He disclosed that out of the 94 wholesale suppliers granted permits to import PMS, only eight suppliers managed to deliver eight cargoes of PMS, totaling 251,000 metric tons between June and September 2023.
The low import performance is attributed to challenges related to forex illiquidity, which has constrained the ability of oil marketing companies to import the product.
Ahmed expressed hope that government efforts to stabilize the forex market would facilitate increased PMS importation.
Furthermore, Ahmed assured that the NMDPRA would continue to play its role in ensuring energy security for the country by issuing relevant regulatory approvals and guidelines.
He emphasized that the supply of petroleum products would improve with the commissioning of the Dangote Refinery and the rehabilitation of NNPCL refineries in the short to medium term.
Additionally, the Authority has developed a framework for operationalizing the National Strategic Stock (NSS), which will guarantee the availability of petroleum products nationwide and help stabilize market prices during supply chain disruptions.
Addressing energy security and market competition, Ahmed stressed the importance of energy security in a deregulated industry, emphasizing the need for sufficient volumes, strategic storages, efficient distribution systems, and affordable prices.
He noted that since the announcement of deregulation, daily PMS evacuation for nationwide distribution has averaged 44.3 million liters, a 33.58% reduction from the 66.7 million liters per day before deregulation.
Despite this, the supply of PMS and other petroleum products has remained above required thresholds.
