Nigeria's NNPCL now sole petrol importer as oil marketers battle FX constraints

Just four months after imports were opened up to private players, Nigeria's national oil firm NNPC Ltd has again become the sole importer of petrol, its chief executive said on Monday. 

Mele Kyari made this statement while participating in the current Energy Labour Summit convened by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) in Abuja.

Kyari also stressed that the government had not reinstated a decades-old petrol subsidy, which was eliminated at the end of May, despite concerns from investors of a de facto return as pump prices have not moved since July, despite more than 30% rise in oil prices.

According to Kyari, the NNPCL has once again become the sole importer of petrol since private companies cannot access foreign currency due to shortage issues.  

“We are the only company importing petrol into the country. None of them can do it today. For them, access to foreign exchange is difficult. We create foreign exchange (FX), therefore we have access to FX, while their access to FX is limited,” he stated.

Nigeria, the largest oil exporter in Africa, relies heavily on fuel imports since its domestic refineries cannot produce enough to satisfy the needs of its 200 million residents. Before the end of the fuel subsidy regime, NNPC, now NNPCL, held the exclusive role of importing fuel into the country.

However, on June 15, following the removal of the fuel subsidy, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) granted licenses to oil marketers to commence the importation of petroleum products.

This enabled Emadeb Energy Services Limited to import about 27 million litres of petrol into the country on July 20, establishing itself as the first private company to do so in the post-subsidy era.

Now, private companies are facing challenges in getting foreign currencies to import premium motor spirit (PMS), which was previously the sole responsibility of NNPCL.

Nigeria currently faces a significant foreign currency shortage, leading to the naira hitting historic lows on the unofficial market. The recently appointed central bank governor has stated that policymakers are confronted with an almost $7 billion backlog in foreign exchange requests.