Petroleum products importers in Nigeria may soon be forced out of business if they fail to adapt to the growing trend of local refining, according to the Crude Oil Refinery Owners Association of Nigeria (CORAN).
This warning comes as the Federal Government reinstated the controversial naira-for-crude deal despite calls for its cancellation by the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN).
CORAN’s Publicity Secretary, Eche Idoko, dismissed DAPPMAN’s claims that selling crude to local refineries in naira negatively impacts the economy, arguing that depot owners are primarily concerned about protecting their import business.
“We understand why they wanted the Federal Government to cancel the naira-for-crude deal. For them, they would not want to go out of the market. A man who has drums that store water in order to make money, would not want the pipes to run. Because if the pipes start running, his drums go out of business. That’s what tank farm owners do,” Idoko explained.
Idoko revealed that appeals were made to depot owners to re-strategize to remain relevant as Nigeria transitions to a refining hub, but they have remained committed to fuel importation. “As long as they decide to keep to that position, at some point, they will all go out of business. Because refining in Nigeria has come to stay,” he stressed.
He noted that petrol prices were heading toward N700 per liter before the naira-for-crude deal was discontinued in March, adding that prices should have dropped further with the global crash in crude oil prices if the policy had remained in place.
“When we turned to local refining in this country, we saw the price of petroleum products dropping. Unfortunately, we have middlemen who pride themselves as agents. They have no scheme in the game other than that they have fixed prices because they don’t have risk,” Idoko stated.
The naira-for-crude deal, ordered by President Bola Tinubu, allowed the sale of crude in naira to the Dangote refinery, triggering a significant crash in fuel prices from about N1,100 per liter to N860. However, importers complained about losses averaging N2.5 billion per day or N76.5 billion monthly due to Dangote’s price reductions.
Despite DAPPMAN’s Executive Secretary Olufemi Adewole arguing that the naira-for-crude framework risked Nigeria’s foreign exchange stability and could deter foreign investment, the Federal Government has ordered the continuation of the policy indefinitely.
Source: Punch ng
