Tuesday, October 10, 2023

NNPC becomes sole petrol importer in Nigeria as forex shortages hit rivals

Nigeria's national oil firm NNPC Ltd has again become the sole importer of petrol because local private firms are unable to obtain foreign currency, its chief executive said on Monday, four months after imports were opened up to private players.

Mele Kyari also said the government had not reintroduced a decades-old petrol subsidy scrapped at the end of May, despite concerns from investors of a de facto return as pump prices have not moved since July, despite a more than 30% rise in oil prices.

Africa's largest oil exporter, Nigeria, imports nearly all its fuel as it does not refine nearly enough to meet the demand of its 200 million citizens. In recent years, it has swapped crude for fuel, depriving it of a source of U.S. dollars.

Opening up petrol imports to the private sector was part of reforms by President Bola Tinubu to wean the country off fuel subsidies.

Some fuel companies began imports in July but Kyari told an energy conference that they were now struggling to get foreign currencies to import petrol, known as premium motor spirit (PMS).

"We are the only company importing PMS into the country," he said.

Speaking to reporters after a meeting with Tinubu, Kyari dismissed the concerns that a partial fuel subsidy had been restored.

"We are recovering our full cost from the products that we import. No subsidy whatsoever," he said.

Petrol is widely used by households and small businesses to power generators because millions of Nigerians are not connected to the national electricity grid.

Nigeria is in the grips of foreign currency shortages, which have seen the naira weaken to record lows on the parallel market. The new central bank governor has said that policymakers faced a nearly $7 billion backlog in foreign exchange demand. 

By MacDonald Dzirutwe, Reuters

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