NNPC is again Nigeria’s sole petrol importer months after reforms

NNPC Ltd has resumed its role as the exclusive importer of petrol into Nigeria due to challenges faced by licensed local private firms in obtaining foreign currency.

This comes four months after the government opened up petrol imports to private players.

“We are the only company importing PMS into the country,” NNPC chief executive Mele Kyari told an energy conference, Reuters reported Monday.

“None of them (fuel companies) can do it today. For them, access to foreign exchange is difficult. We create FX, therefore we have access to FX and their access to FX is limited.”

Nigeria relies heavily on fuel imports because it is unable to refine fuel s domestic refining capacity falls significantly short of meeting the demand of its 200 million citizens.

In recent years, the country has engaged in crude-for-fuel swaps, which has reduced its access to much-needed U.S. dollars.

The decision to involve the private sector in petrol imports was part of President Bola Tinubu’s efforts to reform the country’s fuel subsidy system, which has been in place for decades.

While some private fuel companies began importing petrol in July, they are now grappling with difficulties in obtaining foreign currency for these imports, leaving NNPC as the sole importer.

Nigeria is grappling with foreign currency shortages, made worse after government reforms allowed the naira to weaken from 464 to about over 770 to a dollar within three months.

The naira fell to below 1000 on the parallel market in September, a historic decline.

resulting in a weakened national currency (the naira) on the parallel market. The backlog in foreign exchange demand is a significant challenge for policymakers, impacting the country’s economic stability.

Despite a significant increase in global oil prices, petrol pump prices in Nigeria have remained unchanged since July. This has raised concerns of a potential reintroduction of a partial fuel subsidy, although official statements have not confirmed this.

– What this means for Nigerians

For Nigerians, the new development has meanings.

• Higher petrol prices: If NNPC is the only importer of petrol, it will have more control over prices, although it is unlikely to increase prices as a state company.

• Petrol shortages: This could also lead to shortages, and disruption for businesses and households.