Nigerian Oil and Gas Marketers Push Back Against ‘Dollarisation’ of NPA and NIMASA Charges Amid Rising Energy Costs
The Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) expressed concern on Tuesday over the ongoing “dollarization” of the Nigerian economy, particularly the imposition of charges by the Nigerian Ports Authority (NPA) and the Nigerian Maritime Administration and Safety Agency (NIMASA) on operators.
Addressing the media regarding the tough economic conditions faced by marketers, NOGASA’s National President, Benneth Korie, highlighted issues such as escalating diesel prices and poor road conditions, emphasizing the illogicality of conducting transactions in dollars within Nigeria.
One of the longstanding grievances of oil and gas marketers is the practice of charging fees in dollars for operations within Nigeria, including the handling of refined products by daughter vessels chartered from larger vessels arriving in Lagos.
Korie argued that to address the energy crisis, it is essential for crude oil to be traded in naira once the Dangote refinery and the federal government refinery in Port Harcourt commence operations, although their value may still be pegged to the dollar by authorities.
He contended that the current scenario of purchasing petrol at N620 per litre and then utilizing diesel, priced at N1,700 per litre, for transportation across the country is unsustainable.
NOGASA urged the federal government to consider temporarily fixing diesel prices and cautioned that failure to address these challenges could lead to the collapse of businesses operated by marketers due to the hostile business environment.
He emphasized that the federal government could sell diesel for N650 per litre without causing significant disruption, similar to the current pricing structure for petrol.
He contended that it is inconsistent for the Nigerian Ports Authority (NPA) and the Nigerian Maritime Administration and Safety Agency (NIMASA) to demand payments in dollars, exacerbating the existing foreign exchange (FX) challenges, and called for government intervention in this regard.
“Another one that looks funny to us is that NIMASA is in Nigeria, NPA is in Nigeria and somebody is coming out to say, we are collecting dollars because our operations are in dollars.
“You are the government, you can go to the Central Bank of Nigeria (CBN) and pay for your operations, but allow people to pay naira in Nigeria. You are in this country and you must trade in Naira.
“They should remove Naira transactions from NIMASA and NPA. They should stop collecting dollars from Nigerians for any service. This is very important.
“If you are buying crude oil from the government you pay in dollars, so how much are you going to sell? If we have one price from the government, then when you are buying crude oil from the government, you multiply it by the government rate and then you convert to Naira and begin to sell to Nigeria in Naira,” he maintained.
Korie warned that numerous members of the association face the imminent risk of being imprisoned by commercial banks, given the exorbitant interest rates of 30 percent compounded by the prevailing economic conditions.
“The bank interest is too high. Today, if you are going to buy one truck of PMS, you are going to spend N30 million and then you will go to the bank to get that money at 30 per cent, all in the name of this inflation.
“If care is not taken, we also will withdraw our services because there’s no way out. If we continue this way, banks will jail all of us one by one. Filling stations are closing down, and 70 per cent of them are out of business, “he lamented.
Korie advocated for the government to reintroduce and strengthen the Petroleum Equalization Fund (PEF) to facilitate marketers in recovering and reinvesting their capital. Additionally, he pressed for urgent road repairs across the nation to minimize truck wear and tear, while urging the government to declare a state of emergency for the refineries.
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The NOGASA president expressed support for the subsidy removal but noted its current ineffectiveness. He called for a stakeholders’ meeting to address these issues and stressed that the “dollarization” of the economy significantly impacts NOGASA members’ businesses. “This dependence on dollars must cease. Steering clear of the dollar will restore normalcy,” he emphasized.
