• Oil & Gas - News
  • Updated: March 08, 2024

Petroleum sector voices concern over Nigeria's fuel supply chain amid forex market uncertainty

Petroleum sector voices concern over Nigeria's fuel supply c

In a recent development, the Major Energies Marketers Association of Nigeria (MEMAN) expressed worry about the complexity facing the country's petroleum product distribution and supply chain as a result of foreign exchange market uncertainty.

Clement Isong, the association's Executive Secretary, spoke to the media about the issues faced by the FX market's complexities during MEMAN's quarterly webinar in Lagos. 

Isong notably mentioned the difficulty encountered by big downstream marketers in importing Premium Motor Spirit (PMS), sometimes known as petrol, due to the volatility of the foreign market.

Isong stated that shifting currency rates have made it difficult to precisely determine the landing cost of petroleum products, preventing the selection of suitable pump pricing. 

“We are presently concerned about sustainability, efficiencies, and affordability of energy for Nigerians and we are encouraging the shift to energy transition, specifically into gas space,” Isong said

He also voiced concern about the impact of dollarization on charges levied by government organisations such as the Nigeria Ports Authority (NPA) and the Nigerian Maritime Administration and Safety Agency (NIMASA), which contribute to the rise in pump prices.

Despite the Federal Government's intervention following the elimination of gasoline subsidies, Isong criticised the dollarization policy, claiming that it weakens industry sustainability and hinders investment. 

He emphasised the importance of the petroleum industry exploring alternative energy sources such as compressed natural gas (CNG) and solar power to reduce operating costs and increase efficiency.

MEMAN pushes for a shift to alternate energy sources as a way to lessen reliance on traditional fuels while improving environmental sustainability. 

Furthermore, industry experts emphasised the government's efforts to encourage the use of Liquified Petroleum Gas (LPG) and CNG applications, as well as the need for infrastructure development in facilitating the shift to greener energy sources.

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