Naira Depreciation And External Factors Disrupt Downstream Oil Marketers’ Stability

The Major Energy Marketers Association of Nigeria (MEMAN) revealed on Monday that challenges stemming from the depreciation of the Naira and other issues have disrupted operations and investment activities in the downstream sector. Clement Isong, the Executive Secretary/CEO of MEMAN, conveyed this information during a media forum in Lagos. He highlighted the adverse impact of uncertainties in the foreign exchange (forex) market on members’ ability to effectively market petrol nationwide.

Isong pointed out that despite receiving products from the Nigerian National Petroleum Company Limited (NNPCL) retail, the payments for ship-to-ship offloading are conducted in US Dollars, leading to increased costs whenever the exchange rate rises. Expressing concerns about sustainability, efficiency, and affordability of energy for Nigerians, Isong advocated for a shift towards energy transition, specifically into the gas space.

While acknowledging the Federal Government’s interventions after exiting the petrol subsidy regime, Isong attributed the weakening industry and discouragement of investment to the dollarization policy, primarily influenced by fluctuating dollar movements and rate unpredictability.

Adelanke Bayo-Adepoju, Gas and Renewable Energy Specialist at MEMAN, added to the discussion by emphasizing the benefits of transitioning to Compressed Natural Gas (CNG) as an alternative to petrol. She disclosed ongoing efforts to convert approximately 1 million vehicles to run on CNG by 2027, establishing over 1,000 conversion workshops across the country.

In other news, the Defence minister has directed the Defence Intelligence Agency (DIA) to pursue individuals involved in coup attempts, and the Central Bank of Nigeria (CBN) reports a significant increase in remittances to $1.3 billion in February. Additionally, the government expresses commitment to sustainable energy transition in collaboration with the CBN for gas exports.

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