Due to the current intricacies of the foreign exchange market, the country’s petroleum products distribution and supply chain may face more challenges.

Major downstream marketers issued the warning on Thursday in Lagos under the aegis of the Major Energies Marketers Association of Nigeria (MEMAN).

Clement Isong, the association’s executive secretary, spoke at the MEMAN quarterly webinar and engagement with the media forum.

Mr Isong said, “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.” 

For instance, he said, marketers paid government agencies (NPA, NIMASA, etc.) about $10 per metric ton, and given the current exchange rate, this would translate to a higher pump price.

Speaking further about the impact of the forex market on the business, Mr Isong noted that in 2023, when President Bola Tinubu removed the subsidy, and with the exchange rate at that time, the cost of a litre was about N4.85.

“Today, it has added up to about N11.83 a litre, and for STS at $30 per metric ton, which was N14.54 today with the dollar at N1,600, that has pushed it up to N28.44 which is adding up to the pump price,” Mr Isong explained.

Mr Isong said that even with separate negotiations by marketers, transporters charged an average of N5 to N8 per litre more.

He recalled that last July, Mr Tinubu promised that the administration would continue monitoring the effects of the exchange rate and inflation on gasoline prices and, when necessary, the government would intervene.

“We have seen those interventions at different times, and they provide a level of stability, but our advocacy is to encourage a paradigm shift to reduce operating costs.

“Trucks are encouraged to move from diesel to CNG; depots and retail outlets to move from diesel to CNG and/or solar energy,” Mr Isong added.

(NAN)