Economy and Business

FX crisis: Oil and Gas dealers threaten Shutdown as 70% of Downstream Businesses Collapse

The downstream oil sector in Nigeria is on the brink of a crisis as oil and gas dealers, represented by the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), have issued a stern warning of potential service withdrawal.

This comes in the wake of a recent resolution following their executive committee meeting in Abuja, where NOGASA expressed serious concerns over the collapse of approximately 70% of businesses in the industry due to the harsh operating conditions.

President of NOGASA, Benneth Korie, highlighted the dire situation, citing challenges faced by oil marketers in funding operations amidst soaring bank interest rates.

Korie emphasized the overwhelming burden faced by operators, who are compelled to acquire funds at exorbitant interest rates exceeding 30%, exacerbating financial strain and hindering business viability.

They called for the pegging of the foreign exchange rate at N750/$ to facilitate refinery operations and stimulate the production of refined products domestically. Korie warned that failure to address these pressing issues could result in the withdrawal of services by NOGASA’s over 200 members starting from the next month.

The downstream oil crisis coincides with heightened anticipation for the release of refined petroleum products from the Dangote and Port Harcourt refineries, seen as critical for alleviating supply shortages nationwide.

However, amidst forex crises and inflationary pressures, operators in the oil and gas sector confront mounting economic challenges, necessitating urgent government intervention.

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