The Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), representing over 200 companies in the downstream oil sector, issued a stark warning on Wednesday.
They claim that 70% of businesses within the industry have already collapsed due to a challenging operating environment, and threaten to withdraw their services next month if the government fails to address their concerns.
Key Issues Highlighted:
NOGASA President Benneth Korie, speaking after an executive committee meeting, cited the “harsh operating environment” as the primary reason for the industry’s decline.
This likely refers to factors such as:
Unfavorable foreign exchange rates impacting imports and profitability
Regulatory challenges and bureaucratic hurdles
Competition from subsidized imported products
“Another issue is that of high bank interest rates. Today if you want to buy one truck of PMS, you will spend N30m. And if you go to a bank to get N30m at over 30 per cent interest rate, you know how much you will pay to the bank, all in the name of inflation.
“So if care is not taken, we will also withdraw our service because there is no way out. 70 per cent of oil traders are out of business, so it is better that the government looks into this issue before it gets out of hand. Many of them (operators) cannot talk but they come to us to complain.
“So we just want to tell the Nigerian government that if something is not done from now to the end of this month, it will affect the marketers. Everybody is struggling to get money from the bank. From the 1st of next month, we will withdraw services if nothing is done,” Korie stated.
Demands and Potential Impact:
NOGASA demands include pegging the foreign exchange rate at N750/$ to enable refineries to operate efficiently and produce domestically refined products. This specific demand raises concerns about potential distortions in the market and potential for unintended consequences.
Withdrawal Threat and Uncertainty:
The potential withdrawal of services by over 200 NOGASA members could significantly disrupt the supply chain of vital fuel products across the country. However, the feasibility and impact of such a move remain unclear, and further dialogue between the association and government is necessary.
Need for Transparency and Solutions:
Addressing the concerns raised by NOGASA requires a transparent and collaborative approach. The government should engage in open dialogue with industry stakeholders to understand their challenges and explore viable solutions that promote a healthy and sustainable downstream oil sector in Nigeria.
Discover more from News Round The Clock
Subscribe to get the latest posts sent to your email.
