In a significant development for Nigeria’s fuel supply chain, Emadeb Energy Services Limited has shattered the long-standing monopoly held by the Nigerian National Petroleum Company Limited (NNPC) as the sole importer of petroleum products into the country. On Wednesday, July 19, 2023, Emadeb Energy received its much-awaited shipment of 27 million litres of petrol, marking a turning point in the nation’s energy landscape.
The imported petrol, which had been on the sea for some time, is expected to alleviate the country’s fuel scarcity to a considerable extent. However, there is a downside to the breakthrough, as the substantial cost of importing the product means that Nigerian consumers will continue to pay a higher price, exceeding N600 per litre.
The timing of the shipment coincides with the sale of a barrel of crude oil at $80, coupled with the significant depreciation of the Nigerian Naira against the US dollar. Adebowale Olujimi, the Chief Executive Officer of Emadeb Energy, along with five bank partners, undertook a staggering cost to facilitate the importation process. They paid over $17 million (approximately N13 billion) to hire the vessel, ST Nnene, responsible for transporting the petrol from Togo, where the shipment had initially landed, to Nigeria.
The five banks involved in this ambitious endeavor are Polaris First Bank, Union Bank, Access Bank, Fidelity Bank, and Emadeb Energy. The successful delivery of the shipment was commemorated at the Emadeb Jetty in Ijegun-Egba, where Adebowale Olujimi expressed his concerns about the sustainability of petrol importation. He stressed the urgency for the Nigerian government to revive the nation’s refineries as the way forward.
During the recent importation, the price of Premium Motor Spirit (PMS), commonly known as petrol, surged to over N600 per litre, indicating the challenging dynamics of the petroleum business. Olujimi underscored the necessity of finding more sustainable solutions to tackle this issue, citing the heavy reliance on vast amounts of US dollars to facilitate imports. Revitalizing local refineries is a strategic move that would bolster Nigeria’s self-sufficiency and stability in the fuel sector.
Meanwhile, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) revealed that several oil marketers have commenced the importation of petrol into Nigeria. Historically, the Nigerian National Petroleum Corporation (NNPC) had been responsible for the majority of petrol imports. However, with the emergence of private players like Emadeb Energy and other oil marketing firms, the monopoly is gradually being dismantled.
Faroul Ahmed, the Chief Executive Officer of NMDPRA, disclosed that out of the 56 oil marketing firms that applied for licenses, 10 had demonstrated a strong commitment to importing fuel. As a result, three firms have already begun importing petrol into Nigeria, signaling a potential shift in the dynamics of the nation’s fuel supply chain.
As Nigeria takes steps towards diversifying its energy market and fostering healthy competition, the hope is that these developments will ultimately lead to more affordable petrol prices for consumers. The government’s emphasis on reviving local refineries may prove to be the key to achieving sustainable and cost-effective fuel supply in the long run.