Forex Crisis Exacerbates Nigeria’s Petrol Subsidy, Sparks Downstream Industry Crisis
Amidst a looming forex crisis, Nigeria grapples with soaring petrol subsidies, exacerbating challenges in the downstream petroleum industry. With the actual cost of petrol surging to N1,202.7 per litre and over 90 licensed marketers unable to import fuel due to unresolved price differentials, the sector faces imminent turmoil.
The forex scarcity, coupled with escalating diesel prices reaching N1,400 per litre, poses a dire threat to transportation operations. NARTO, the association responsible for petroleum product distribution, contemplates a suspension of operations as existing transportation allowances fail to cover the escalating costs.
Moreover, the government’s price control measures, despite deregulation efforts, impede the viability of local refineries like Dangote Refinery, reliant on imported crude oil for processing. The sector’s predicament is further compounded by skyrocketing costs of spare parts and maintenance due to deteriorating road conditions.
The downstream industry’s plight underscores systemic challenges, including inadequate forex allocation, monopolistic importation by NNPC, and lack of level playing field for licensed marketers. Despite assurances of support, including issuance of over 90 import licenses, the sector remains mired in uncertainty.
As transportation costs become unsustainable and operational viability diminishes, stakeholders warn of imminent disruptions in fuel distribution networks. The escalating crisis demands urgent intervention to safeguard the stability of the downstream petroleum sector and avert a looming catastrophe.
