High cost of Diesel responsible for current fuel scarcity — NOGASA
The Natural oil and gas Suppliers Association of Nigeria (NOGASA) has said the current fuel scarcity being witnessed in parts of the country could be attributed to the high cost of diesel for transporting fuel.
This was disclosed by the National Chairman of the Association, Mr Benneth Okorie while fielding questions from journalists in Abuja.
He called for a slight increase in fuel price to tackle the challenges of scarcity, especially in Abuja.
He believed the reason the nation was having scarcity of petroleum products in Abuja particularly, is as a result of the high cost of diesel.
He explained that diesel as at today, was N850 per litre in the market, adding that the money being paid to transporters was not enough.
“If you look at it at N850, and you are giving your driver N1,200 litres from Abuja to Lagos, if you plus and minus it, you will find out that it is about N40 per litre.
“So, if you add it to PMS, buying the depot price and selling here is too high. If you bring it at N40 and you buy at N155 plus N40 which is 195, you now sell at N165, who will do that business ? It is at a loss .
“Even with the PEF, you will not get the product to Abuja, so the answer to your questions is the price of diesel is too high at N850 as at today in the market.
“As far as I know, nothing for now to address this situation. The only way out, if you want to know, is that they should increase the price of fuel a little to reduce the money spent on the PMS subsidy.”
Okorie said that the hike in diesel price was responsible for most activities because you use diesel to transport fuel to filling stations, it is used for businesses in Nigeria because of lack of light.
He said that if the fuel price could be increased a little, although it would hurt Nigerians, the challenge would be resolved because that was the only solution.
“Increase the fuel price a little so that the savings will be enough for the Central Bank (CBN) to have enough forex .
“You and I know that everything now is imported, the diesel is imported and it is a full deregulation business.
“So the importers are not getting dollars to import this diesel at the official rate of CBN.
“So everybody is going to black market to get dollars to import their diesel, so you expect the price of diesel to be high.”
According to Okorie, if the rate of the user on that foreign exchange can be brought down, it will help other businessmen importing diesel to bring it at a low price.
He said that other places like Lagos and Port Harcourt were not experiencing queues because of the presence of ports in those states.
“You are talking about Lagos to Abuja and you are talking about Port Harcourt to Abuja and you are talking about Warri to Abuja so the cost of diesel for transporting the product is high.
“Not just that, the roads are bad, the maintenance is too high. So you cannot make any profit, if you go round now you see 75 per cent of filling stations in Nigeria are going out of business.”
Okorie said that the government needed to do something fast otherwise diesel would be sold between N1,000 to N1,500 in the next two weeks.
He said that another way forward was to ensure that the refineries were working. I heard in the news that Dangote needs $1.1billion to complete the refinery before the end of the year.
“I will advise that if all the Banks can come together and assist him to get it done quickly, this is the only remedy we have for now.”
Okorie called for urgent steps to address the situation before it affected salaries and businesses in Nigeria.
