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Marketers seek offshore refiners’ support to crash petroleum products cost

The Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) says talks are at advanced stage with four offshore refineries for the supply of 300,000 metric tons of Petrol, Diesel, Jet A1 and cooking gas into the Nigerian market by first quarter of 2024.

This was as the group disagreed with calls in some quarters that the retail pump price of petrol should be within the range of N1,200 per litre.

PETROAN National President, Mr. Billy Harry, disclosed this during a telephone interview with Daily Sun yesterday.

He said the refineries located in in Kazakhstan   and Houston are eager to partner with the association under favourable terms to both parties.

‘‘I should be travelling to Houston, Texas next week to wrap talks with the refineries in Houston on how to get the supplies into the country.

On whether the current forex challenges wouldn’t impact on their plans for petroleum products imports, Harry said the association is being clever in doing and was exploring the option of alternative payment solutions that wouldn’t put pressure on the country’s forex.

The PETROAN President said his association would be seeking alternative funding model without necessarily bothering the already troubled Nigerian forex market.

‘‘ We are working on meeting the international best practice to pay for these cargoes without resort to our local foreign exchange market with monies that have paper trail. Every payment in today’s world must have a tracking mechanism. The source must By so doing, we will be able to bring in products at more cheaper prices for our members,’’.

He said with the coming onboard of the Port Harcourt refinery, there should be a little bit or respite, adding that the ultimate goal should be the entire rehabilitation of the other refineries in Warri and Kaduna in order to bring stability in the distribution value chain

Billy said the need to boost the purchasing power of Nigerians through access to cheaper fuel at affordable rates informed the decision of the group to source external partners.

He worried that a road side food seller makes more profit margin that fuel retailers, saying the margins on products was no longer sustainable.

The PETROAN President said fuel retailers were only barely managing to survive in the face of current economic realities which has eaten deep into its profit margins, especially for retailers that don’t sell between 5,000 to 10,000 litres per day

He lamented that the cost of diesel to power generators for the retail outlets keeps skyrocketing alongside other overhead cost.

But in order to continue to be in operation, he said retail owners are coming up with various survival strategies to remain afloat. Some of these according to him include the drastic reduction in overhead cost, staff cut, among others.

On the position of marketers that petrol should sell for N1, 200 per litre, a national Daily (Not Daily Sun) had reported that subsidy on petrol was increasing considering the crash of the naira against the United Staes Dollar and the cost of crude oil, stressing that petrol should sell for N1.200 in a free market.

But, Harry further disagrees with such position, saying as long as NNPC continues to sell products to marketers at a price range that still allows them to dispense  at less N1,000 per litre, then it doesn’t make sense for anyone to hike prices to as much as N1,200.

In its reaction, to the N1.200 per litre price peg, Chief Corporate Communications Officer, NNPC Limited, Mr. Olufemi Soneye, said NNPC Limited has not clashed with party.

‘’The publication sought confirmation on alleged subsidy reduction, to which NNPC responded that subsidy has been entirely removed,’’.


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