Petrol to Sell Cheaper With Niger Import

Petrol to Sell Cheaper With Niger Import

Nigerians stand the chance to pay less for petrol if oil marketers will turn north and buy from Niger Republic, whose new refinery is just 30 kilometres across the border, as investigations show.

Petrol to Sell Cheaper With Niger Import

The export price per litre of petrol from Niger’s Soraz refinery is 360 CFA francs, which is equivalent to N114, according to the Niger’s state oil company Sonidep.

In Nigeria, the landing cost of petrol per litre was N124.47 as of November 5, based on PPPRA figures, indicating a difference of about N11 compared to the export price from Niger.

The Petroleum Products Pricing and Regulatory Agency puts expected retail price of petrol imported from Europe and other far-flung countries at N139.96, but with about N44 subsidy per litre, oil sells at N97 per litre around the country.

Industry experts say if petrol is imported from Niger and the same subsidy is paid, a litre could sell in Nigeria at just a little over N80.

Niger’s oil minister is quoted as saying that the Soraz Refinery is currently operating at half its 20,000 barrel capacity, due to lack of patronage from neighboring West African countries including Nigeria.

“Today Soraz produces 10,000 barrels per day, and it’s saying that it is due to a shortfall in the export level,” Foumakoye Gado said.

Sonidep officially set the price of its exported petrol at 360 CFA francs (N114) per litre, however, there have been few takers among the country’s neighbours because prices are not competitive.

“The countries of the sub-region – Mali, Burkina Faso, Nigeria – want to come buy in Niger, but on the condition that they gain something … They have to earn something, even if it’s one franc per litre,” Gado said. He added that the government planned to put in place a panel charged with fixing more competitive price levels for 2013.

But analysts say with the subsidy of N44 per litre factored in, it would be profitable for Nigerian marketers to import from Niger.

Currently, there are no applications from marketers to import petrol from the Niger refinery, though four marketers have already gotten diesel import licenses and have been importing the product for months now.

A Department of Petroleum Resources (DPR) official who does not want to be named said the lack of patronage of Niger petrol is as a result of low confidence on subsidy reimbursement in Nigeria.

“If you look at the industry now, not all marketers are willing to import PMS from anywhere, because there is no guarantee if government is willing to pay the subsidy on the petrol looking at what is going on now in the industry,” the official said.

He said the Federal Government is owing so many marketers billions for subsidy on petrol they imported since early this year. “So importing petrol is no longer a good business for marketers,” he added.

The official said at the moment no application to import petrol is received by the department despite the proximity of the Soraz refinery to major Northern cities like Kano, Katsina, Daura and Zamfara.

Observers say fuel from Niger is too meagre to satisfy the huge demand from Nigeria.

Nigeria has four refineries in Warri, Kaduna and Port Harcourt with a combined refining capacity of 445,000 per day. But the refineries are operating far below their installed capacities due to poor maintenance and pipeline vandalism.

Most Nigerian fuel marketers are importing from Europe and India or buy from the high seas.

Source: Naija.ng

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