Nigeria: Oil Marketers Allege Preferential Treatment for NNPC in FX Accessibility

Oil marketers and petroleum depot operators, under the aegis of Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), have challenged the preferential treatment that the Nigerian National Petroleum Company (NNPC) Limited is perceived to receive regarding access to foreign exchange (FX) at the official rate.

Chairman of DAPPMAN and Chief Executive Officer of North-west Petroleum and Gas Company, Mrs. Winifred Akpani, advanced her members’ position on Tuesday at a press conference in Lagos.

Akpani called on the federal government and the Central Bank of Nigeria (CBN) to ensure a level-playing field for all players in the area of FX access to enable them boost capacity and continue to make petrol available to Nigerians.

In another development Tuesday, Tantita Security Services Nigeria Limited (SSNL) kicked against accusation by the Academy of International Affairs that former leader of the Movement for the Emancipation of the Niger Delta (MEND), Chief Government Ekpemupolo, alias Tompolo, was involved in oil theft that had caused the country severe revenue loss.

Akpani stated that accessing FX at the official CBN rate was a serious challenge for marketers and was responsible for the price differential in petrol distribution in the country. She specifically decried the alleged absence of a level-playing field that guaranteed access to dollars for all marketers at official rates, saying having NNPC as sole importer of petrol is not sustainable, considering the huge consumption of the product.

The DAPPMAN chairperson stated that strategic decisions must be made in the industry to ensure Nigeria took full advantage of the expected growth in oil products demand across Africa. She maintained that accessing FX through the CBN window would enhance their capacity, facilitate seamless supply of petrol, and birth a regime of sustainability in terms of storage, distribution and supply across the nation.

Akpani said, “DAPPMAN hereby calls on the government to establish a level playing field in the sector by giving petroleum marketers access to forex at the CBN exchange rate for their operations.

“The NNPC, which historically served as the supplier of last resort, is now the major oil downstream company in Nigeria with the acquisition of OVH and has full access to dollars at CBN’s official rates.

“The NNPC also has access to products through swap arrangements.

“For us in Nigeria, this will include full deregulation of the sector and a deliberate strategy geared towards creating an enabling environment for all petroleum marketers to add value, alongside the NNPC.”

Akpani emphasised that accessing FX at the official rate would boost fuel supply across the country, adding that the burden of sourcing FX through the parallel market for transactions domiciled in Nigeria has left petroleum marketers in dire straits.

She said, “Accessing dollars for our operations has been an insurmountable hurdle for petroleum marketers.

“The difference between CBN exchange rate and the parallel market exchange rate continues to get wider by the day.”

Akpani noted that in addition to core operational expenses denominated in dollars, petroleum marketers also contended with sourcing funds from the parallel market to pay fees, levies, and some unauthorised levies also charged in dollars.

She explained that to charter a vessel to convey 20,000 metric tons of petrol within Nigeria for 10 days, with freight charges denominated in dollar, amounted to about N220 million at official FX rate of N440, while it cost a whooping N440 million for petroleum marketers who source FX from the parallel market at N880.

Akpani further explained, “This implies an additional cost of N11 per litre for this transaction due to the forex official and parallel market differential.

“For the same transaction, jetty fees, also charged in dollar, amounts to N15.4 million at official forex rates and N30.8 million for petroleum marketers, who source from the parallel market.

“In addition, jetty berth is charged in dollars and comes to N2.2 million at official forex rate and N4.4 million at parallel market rate.

“While port dues, charged in dollars by the Nigerian Ports Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA), come to N71.51 million at official forex rate and N142.796 million for marketers who source forex from the parallel market.”

She said DAPPMAN considered the government’s plan to remove petrol subsidy in 2023 as the right decision that would reposition the sector for sustainable growth and development.

Surveillance Contract: Firm Kicks as Academy of International Affairs Accuses Tompolo of Oil Theft

Tantita Security Services Nigeria Limited, on Tuesday, kicked against accusation by the Academy of International Affairs that former MEND leader, Tompolo, was involved in oil theft.

Lead Consultant to SSNL, Mr. Emmanuel Jakpa, said in a statement issued in Warri that there was no justification for the accusation. Jakpa also said there was nothing wrong in awarding a surveillance contract to a private firm by the federal government for the protection of its national asset.

The academy, which comprised ex-ministers and ex-diplomats, had in a statement signed by its president, Professor Bolaji Akinyemi, called on President Muhammadu Buhari to terminate the award of the pipeline security surveillance contract to Tantita SSNL.

But in his reaction, Jakpa said, “Few days ago a little known but distinguished body stepped out of the closet and launched an unprovoked attacked on the widely successful surveillance contract awarded to Tantita.

“But in attacking Tompolo and the good work Tantita is doing they shied away from deploying their undoubtedly massive reach in proposing a solution to the hydra headed problem of oil theft.

“By now, you would have heard of the din arising from calls for the cancellation of this contract. The din continues to rise, in spite of the fact that the contract has already justified itself with the big finds of humongous leakages in our petroleum export architecture.”

The consultant wondered whether a judicial panel would visit the creeks unaided and find the export lines by themselves, adding, “The manner of argumentation by these distinguished academicians leaves so much to be desired, it appears to be self-defeating.”

Jakpa said the fundamental error in the analysis of the group and the consequent prognostication was the notion that awarding a pipeline surveillance contract to a private entity was in itself a failure of governance and a slur on institutions, like the armed forces.

He recalled that similar contracts were awarded in the past to privately owned companies, adding that at the moment virtually every pipeline operator has a private security company contracted to provide security to some pipeline or other production asset.

He stated, “The extremely unsavoury language used by the distinguished diplomats in associating Ekpemupolo with the illicit trade is much to be deprecated, more so as they have failed to substantiate their allegations.”

Jakpa said if the Tantita contract succeeded, it would increase the country’s revenue by up to a 100 per cent of the present baseline. He said the firm had made mindboggling discoveries, which had not been refuted by anybody and certainly not the academy.

“We must be wary of the tyranny of experts. Those highly trained men with a hammer, to whom everything looks like a nail,” he said.

Peter Uzoho in Lagos and Sylvester Idowu in Warri

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