By Adewale Sanyaolu
Masters Energy Oil and Gas Limited urged the federal government to put in place measures aimed at addressing the foreign exchange crises currently a threat against the importation and distribution of petroleum products in the country.
The Executive Director, Operations, Masters Energy Group, Mr. Felix Eribo, made the submissions during an interview on the sidelines of the just-concluded 2023 Oil Trading and Logistics (OTL) Africa Downstream Week, held in Lagos recently.
The foreign exchange crises in the downstream sector has led to the suspension of petroleum products imports by licensed companies, leaving only the NNPCL as the sole importer
This was even as the indigenous oil and gas firm advocated for increased gas production and availability in the domestic market to encourage both marketing companies and the Nigerian masses to key into the federal government’s Autogas policy.
Despite the challenges around FX and high agency fees which all marketers are grappling with, Eribo said the company remains a customer-centric company that feels the plight of the masses and makes its products highly affordable.
“One good thing in the oil and gas business is your capacity and your efficiency. If you are able to manage your cost efficiently, you will be able to compete in the market and make profit and Masters Energy is doing that well,” he added.
The oil marketing group also urged the Federal Government to put in place measures aimed at addressing the foreign exchange challenge that is posing a major hiccup in the importation and marketing of petroleum products in the country.
Eribo said the company is already keying into the autogas policy, which is more popular with the use of Compressed Natural Gas (CNG) to power vehicles both mass transit buses and private cars.
He said Masters Energy is collaborating with the government to ensure the success of the autogas programme and has started establishing its CNG refilling stations across its major filling stations in the country.
Eribo, pointed out that the challenge in its adoption was the unavailability of the gas, adding that the factor discourages marketers from setting up CNG refilling plants and also dampens the willingness of vehicle owners to convert their vehicles to CNG-powered.
Eribo explained, “I’ve told you earlier that we have over 300 filling stations across the country. So, we are keying into that Autogas policy. And we have started establishing our CNG refilling stations starting from our major filling stations in major cities across the country, especially in the South-east.
“So, to address this, the federal government has to ensure that the gas we flare is converted to CNG. When the CNG is available and we can get it, we can then establish the refilling plants in all the stations. Presently, CNG is comparatively cheaper than petrol but the availability is the main issue.
“Today, a lot of people want to do CNG but nobody wants to convert his or her car when there is no CNG to power it. So, the first thing is, CNG should be available before you ask people to convert their vehicles. But in terms of adoption, CNG is in our blueprint already, so we are keying into it.”
He equally urged the federal government to put in place measures aimed at addressing the foreign exchange challenge that is posing a major hiccup in the importation and marketing of petroleum products in the country.
He specifically urged the federal government to address the FX constraints in products importation by mandating the Nigerian Ports Authority (NPA), the Nigerian Customs, the Nigerian Maritime Administration and Safety Agency (NIMASA) amongst other agencies to start collecting all import-related charges and fees in naira rather than in dollar.
He further explained, “In terms of the FX issue, the federal government has a lot to do to manage the FX element in the template. I give you an example: we hire vessels here in Nigeria and most of the vessels are foreign vessels. We have to pay in dollars. But I assume that is outside government’s purview.
“But why should NPA charge in dollars? Because they charge in dollars, you are not going to get that dollar from the CBN. You are putting more pressure on the dollar and everybody who is dealing in petroleum products will have to pay in dollars to government agencies. And the rate continues to go up.
“If the federal government can mandate NPA to charge in naira, it will achieve two things: one, it will reduce the pressure on naira and it will reduce the landing cost of that PMS or whatever product because you are now paying in naira. Then, NIMASA, CABOTAGE, all these are being charged in dollars whereas we are selling the products in naira. So, if we can manage those forex elements within the template, the pressure will come down.”