The inability of the Central Bank of Nigeria (CBN) to meet foreign exchange demands from the private sector has been blamed for the fuel scarcity Nigerians are experiencing within the last two months.
According to the President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo, the oil marketers are unable to obtain forex at the CBN rate, which is cheaper than the parallel market.
Ripples Nigeria Naira Watch had reported that the naira grew weaker on Wednesday at the official market, exchanging for N417/$1, against Tuesday’s N416.25/$1.
While at the parallel market, the naira to dollar was placed between N586-N590/$1. Due to the scarcity of dollars in the official market, businesses like the oil marketers have to depend on the black market despite the cost of forex there.
The rise of crude oil price and lack of forex to trade have affected retailers in the oil industry in Nigeria, and led to rising fuel price.
Commenting on the impact of non-availability of FX on fuel availability, Osifo said, “Although, the increase in the price of crude oil in the international market is partly responsible for the surge, from our findings, the non-availability of foreign exchange (FX) at Central Bank of Nigeria rate to marketers is largely responsible for the increase as they source FX from the parallel market”, he told reporters on Wednesday.
Osifo further stated that, “This is without prejudice to the activities of unscrupulous marketers that are bent on milking Nigerians dry.“
Short term and long term solutions to current oil situation
He gave series of solutions to the ongoing problem, which involves short term and long term, such as removal of taxes and levies from the importation of petroleum products.
The President of PENGASSAN also advised more focus on domestic gas production by Nigeria Liquefied and Natural Gas and other gas producers, while asking that the rehabilitation of the four refineries should be hastened up.
Osifo further stated that, “While on the short term, make FX available to the importers at the official rate, Should this abnormality and distortion continue, it has the ability to drive the country into another round of recession and further impoverish the already battered citizens.”
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