Fuel Importation To Rise under CBN’s Flexible Forex Regime

Fresh indications have emerged that the flexible foreign exchange (forex) regime currently being implemented by the Central Bank of Nigeria (CBN) would benefit petroleum marketers greatly as the policy would provide them with the opportunity to play better in the importation of products. 
A cross section of stakeholders who spoke with Shipping Position Daily last week pointed out that the policy would enable marketers to access forex at relatively cheaper rates, import and sell fuel, make gains and make fresh purchase, and instil confidence in the minds of firms that are selling fuel abroad.
A banker who identified himself as EjikevOnyemeke told our correspondent in an analysis conducted last week that the Naira is already hiking to the dollars‎ on the market index as at last week and that it was still expected that it would continue to gain.
Ejike said that the flexible forex regime would be advantageous to importation of petroleum products. According to him, the new move by the CBN has revived the confidence of investors and importers that forex can be sourced in the open market, and the fear of a drop in price is no longer there.
“It is expected that the dollar which seems to be the yardstick for measuring the strength of the Naira will still have some crazy movement but it would stabilize” he said.
Also speaking with Shipping Position Daily last week, a petroleum marketer, Mr. Fidel Ose said that reasons importers have not been importing petrol was due to the difficulty in getting the dollars from the CBN and borrowing from the banks.  
Ose projected that by end of July, the tank farms would be flooded with petroleum products at a cheap rate.
“Unlike before when some of the importers lost confidence because they were not too sure of the next line of action or policy that the government would take. Most of the money used in importing these products is bank facilities in form of loans, either from local banks or international bank, no investor would want to gamble‎ his money when he was not sure of how the new policy is going to run”
“By July ending there would be a lot of product in the market and from that time upwards, we expect that as more products come in good quality and quantity, prices would now be controlled by forces of demand and supply, according to the dollars”, he said.
Our correspondent further learnt that fuel marketers were already leveraging on their relationship with refineries abroad to make the best of the flexible foreign exchange regime. 
It was gathered that the marketers have been discussing with refineries’ owners overseas to ensure efficient fuel supply, with a guarantee for payment.
In the same vein, the National President, Independent Petroleum Marketers Association of Nigeria (IPMAN); Chief Chinedu Okoronkwo, said marketers will leverage on their contacts and relationships with owners of refineries abroad, among other factors, to buy fuel since the government has simplified the process of accessing forex.
He said some marketers have collaborations with foreign refineries, adding that such marketers would rely on the partnership to import fuel into the country. He said marketers that have their own jetties would have unimpeded access to fuel, while those that do not have jetties would have the opportunity.
Okoronkwo said that indices such as good assets, relationship and confidence, are what marketers need to make the best of opportunities provided by the new forex policy. He said marketers will access forex at relatively cheaper rates, import fuel, sell it, make gains and fresh purchases, and instill confidence in the minds of firms that sell fuel abroad.
He said that “as a result of the policy, marketers are sure of getting opportunities to buy forex. As a result of this, marketers would be bringing fuel into the country. Once marketers are getting returns on investment, they would not hesitate to buy more fuel,  a development, which would go a long way in building confidence in the owners of refineries abroad.’’
He said marketers would not run out of fuel during the new regime, assuring that there would not be fuel scarcity again. Marketers, Okoronkwo said, would be able to project how, when and where to buy dollars whenever they discover that the currency is scarce in the market, stressing that the issue would enable them to do a comparative analysis of happenings in the oil industry for growth.