Major oil marketers operating under the Major Energies Marketers Association of Nigeria (MEMAN) have voiced grievances regarding the dollarization of charges imposed by government agencies, asserting that it is adversely affecting the distribution and supply of petroleum products in the country.
During a media forum organized by MEMAN on Thursday, March 7, 2024, in Lagos, Clement Isong, the Executive Secretary of MEMAN, highlighted the challenges faced by members due to the fluctuating nature of the foreign exchange market. Isong lamented that these complexities have hindered their ability to import Premium Motor Spirit (PMS), commonly known as petrol, and have complicated the calculation of the product’s landing cost for determining the appropriate pump price.
Isong underscored the detrimental impact of the dollarization policy on investments, asserting that certain charges imposed by government agencies such as the Nigeria Ports Authority (NPA) and the Nigerian Maritime Administration and Safety Agency (NIMASA), which are transacted in dollars, are contributing to the escalation of pump prices.
Despite acknowledging the Federal Government’s efforts to intervene since the discontinuation of the petrol subsidy regime, Isong criticized the dollarization policy for its adverse effects on the industry, citing the unpredictability of the dollar rate as a major concern.
Analyzing the implications of forex market fluctuations on business operations, Isong cited examples illustrating the considerable increase in costs, which have consequently led to higher pump prices. He also highlighted additional charges by transporters, further exacerbating the financial burden on oil marketers.
In light of these challenges, Isong reiterated MEMAN’s advocacy for the exploration of alternative energy sources, particularly gas, as a viable solution amidst the escalating costs within the petroleum sector.
The concerns raised by MEMAN underscore the pressing need for policymakers to address the implications of dollarization on the petroleum industry, with a view to mitigating its adverse effects and ensuring the sustainability of the sector.
Credit: Nairametrics
