KEY POINTS
- Nigerian banks raise petrol import to N3.5tn as dollar scarcity tightens.
- Dangote and marketers argue on effects of dependence on import on local supply.
- While supporting a free market for petrol, NLC insists on clarity of petrol prices.
Nigerian banks prepare to increase funding for petrol imports to ₦3.5tn to fund more loans to marketers as the market continues to deregulate, and supply problems remain a worry.
This change is coming at a time when some key industry stakeholders such as Dangote Refinery are questioning the implication of rising importation on production and the nation’s interest.
Higher demand for financing imports
As stated by an AME senior oil and gas banker, in recent months there has been a shopping frenzy for loans needed to finance petrol imports, attributed to Nigeria who has disappeared the subsidised market.
As fuel subsidies diminished and loan dependency increases in Nigeria, its banking sector gears up to accommodate increasing import needs as it used to shy away due to risks involved with regulations.
Different ideas on fuel rates and distribution
Even the Nigeria Labour Congress (NLC) has said that pump prices are above the real cost of products and called for a greater level of openness.
On the other hand, Dangote Refinery believes that high importation may be detrimental to local industries, some marketers state that competition through imports will deter monopolization and moderatize prices.
The current Nigeria’s deregulated petrol market price that is subject to change based on the changes in the international market has received divergent views from stakeholders.
Despite the readiness of banks to fund imports, the conflicting issues on pricing, local manufacture, and the operation of refineries still exercises the sector.
