The Crude Oil Refinery Owners Association of Nigeria (CORAN) has warned that importers of petroleum products in Nigeria may soon go out of business if they refuse to adjust to domestic refining trends.
This caution came as the federal government reinstated the naira-for-crude policy, defying calls by the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) to scrap the initiative.
In a recent interview, the publicity secretary of CORAN, Eche Idoko, dismissed the claims by DAPPMAN that the sale of crude to local refineries in naira affected the economy negatively. According to him, the depot owners, who are primarily importers of petroleum products, made the claims because they would not want to go out of business.
Idoko argued that those who own depots to store imported products will not want the refineries and the pipelines to function, as their functionality would send them out of business.
“We understand why they (the importers) wanted the federal government to cancel the naira-for-crude deal. For them, they would not want to go out of the market. And I keep telling you, a man who has drums that store water in order to make money would not want the pipes to run. Because if the pipes start running, his drums go out of business. That’s what tank farm owners do,” he stated.
The spokesman stated that appeals were made to the depot owners to re-strategize so as to remain relevant when Nigeria becomes a refining hub. However, the importers remained adamant in the business of fuel importation, saying they would go out of business because refining has come to stay in Nigeria.
“Unfortunately, we are asking them to come so that we can re-strategize and change their business strategy so they can remain relevant when Nigeria becomes a refining hub, but they are not forthcoming.
“Well, as long as they decide to keep to that position, at some point, they will all go out of business. Because refining in Nigeria has come to stay,“ he stressed.
He explained that importers do not want local refining to succeed, and they have since resorted to kicking against the naira-for-crude deal.
According to him, the price of petrol was heading to N700 per liter before the naira-for-crude deal was discontinued, adding that the price ought to have dropped further with the crash in crude oil prices across the globe if not for the suspension of the naira deal in March.
Unfortunately, we have middlemen who pride themselves as agents. They have no scheme in the game other than that they have fixed prices because they don’t have risk. All they do is connect Nigerian consumers with international traders and then make their money and go away. So, they don’t have anything to lose. They have no investment in this business. They just come in as agents, make money, and then cash out,” he stated.
Idoko said, “It is foolhardy for anybody to think that in their bid to continue a regime of importing substandard petroleum products, they could thwart the naira-for-crude policy. We appreciate the federal government for bringing back the naira-for-crude deal.”
The naira-for-crude deal ordered by President Bola Tinubu allowed the sale of crude in naira to the Dangote refinery, prompting a crash in fuel prices.
With the supply of crude in naira, the Dangote refinery continued to crash petrol prices across the country. From about N1,100 per liter, the company slashed the price of premium motor spirit to N860.
But importers of petroleum products lamented the repeated reduction of petrol prices by the refinery. Some of the importers lamented that they were compelled to sell below their costs, as consumers only buy from where the product is cheaper.
While Nigerians were rejoicing over the price slashes, fuel importers and retailers said they were counting losses. Importers have lost an average of N2.5 billion per day and N76.5 billion in a month due to Dangote’s sudden price changes in March. idoko stated
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