A group of downstream petroleum operators has appealed to President Bola Ahmed Tinubu to address the activities of the Nigerian National Petroleum Company Limited (NNPC), the Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN), and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
This appeal came as petrol shortages at retail outlets in the Federal Capital Territory (FCT), Abuja, and other major cities intensified.
Some independent marketers, speaking anonymously, accused the NNPC, tank farm owners, and the NMDPRA of hindering seamless distribution to retail outlets. They claimed that the NNPC, now the sole importer of petrol, places independent marketers at the mercy of DAPPMAN (the tank farm owners).
Investigations revealed that the NNPC supplies Premium Motor Spirit (petrol) to private depot owners under DAPPMAN at an ex-depot price of N556.5 per litre. However, these depot owners sell to marketers at N700 to N740, leaving minimal profit margins for retail sales.
Industry operators recalled a previous arrangement where the NNPC allocated petroleum products to tank farm owners for distribution to marketers at a benchmark price. They called on the federal government to restore this system to ensure fair pricing.
“Previously, the NNPC provided allocations to private depot owners with a set price for independent marketers. Now, independent marketers receive no allocation and are subject to high prices set by tank farm owners, which is unsustainable for the industry,” said one marketer.
Marketers also highlighted that giving necessary incentives to the Dangote Refinery and making Nigeria’s four refineries operational would significantly improve product availability and reduce dependence on imports.
Despite these efforts, stakeholders believe that Nigeria’s fuel supply issues will persist due to unresolved fiscal policies and inadequate infrastructure. They also suspect that the government’s capping of petrol pump prices contradicts the supposed subsidy removal announced by President Tinubu last year.
Henry Adigun, a petroleum industry expert, explained that the landing cost of petrol is N1,100 per litre, excluding transportation costs to retail outlets. He cautioned against expecting low prices from the Dangote refinery, as crude pricing will align with international benchmarks.
Adigun also warned that ongoing subsidies on petrol have made the market uncompetitive, creating supply disruptions. He called for a comprehensive review of fiscal policies to foster competition and a strong regulatory environment.
“Marketers have hesitated to import products due to the uncompetitive market and inaccessible foreign exchange. If they import at a higher price, who will cover the difference?” Adigun questioned.
Another industry expert, Taiwo A. Ogunleye, emphasized the importance of regulatory efficiency and transparency in the petroleum value chain, noting that the current scarcity is exacerbated by low volume and insufficient infrastructure.
Ahmed Fashola, Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), highlighted that independent marketers face significant challenges accessing products due to zero allocation from the NNPC and high ex-depot prices from third-party marketers.
“The high cost of accessing products from third-party facilities is making it unviable for most of our members, leading to many shutting down operations,” Fashola said.
Ibrahim Yahaya, General Secretary of the Petroleum Dealers Association of Nigeria (PEDAN), confirmed that while petrol is available, reaching the depots remains problematic.
Clement Isong, Executive Secretary of the Major Energy Marketers Association of Nigeria (MEMAN), and Billy Gillis-Harry, President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), both expressed concerns about the impact of subsidy removal and high logistics costs on the market.
In response, the NNPC acknowledged in a statement that fuel supply disruptions in parts of Lagos and the FCT were due to issues with vessel discharge operations.
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