The House of Representatives ad hoc committee on review of petroleum products, on Tuesday, insisted that the Central Bank of Nigeria (CBN) must provide list of the beneficiaries of foreign exchange allocated to oil marketers.
The chairman of the House ad hoc commmittee, Honourable Raphael Igbokwe, insisted on the details after the Deputy Governor, Economic Policy Directorate of the CBN, Mrs Sarah Alade, who represented the CBN Governor, Mr Godwin Emefiele, explained to the committee how the apex bank disbursed foreign exchange to oil marketers.
The CBN governor’s representative told the committee that, “There is shortage of foreign exchange. In 2013 to 2014, the Federal Government used to get $2 billion to $3 billion monthly and the CBN in the interbank sells about 30 per cent of that. Seventy per cent comes from the foreign investors.
“Today, we get $600 million, $700 million. Nothing comes in from interbank. The sum of $1. 5 million is sold every day and $1 billion is done in December to clear mature letters of credit. It’s not the way it used to be.”
The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, who also appeared before the committee, debunked the committee’s position that the price of petroleum product is being padded.
According to him, 71 per cent of the cost is for the production and freight, 18 per cent balance is covered by depot charges and retailers margin. In other words, the storage tanks, the amount you get by verge of operating a filling station takes another 18 per cent, the output of those is already taking you to roughly about 90 per cent.”
Speaking further, he said: “The transportation is less than 10 per cent; we probably can do better with some of those because the effect of that to the templating is an insignificant one or two per cent but that’s not where the problem is. The problem is with foreign exchange rate of conversion.
“There are two key elements in the template, how much you buy it is internationally fixed, it is not a Nigerian issue. The cost of foreign exchange is a monetary policy issue. So at the time we did the template, the CBN monetary policy was N245, which was the basis upon which we calculated the pricing, today N305 is the exchange rate.”
“And what we have tried to do is to ensure that anybody who sells us foreign exchange follows basically the instructions of the CBN in terms of the amount,’’ he said.
The minister of state, however, hinted that the ministry was working towards ensuring that by 2019 the country exited completely the importation of petroleum products.
“Given on the fact that Dangote is building one refinery, we expect to have an excess situation then,’ he said.
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