Petrol Scarcity hits Lagos, Ibadan, Abuja, due to supply shortage, rising diesel price


Oredola Adeola

Petrol scarcity has resurfaced in some parts of Lagos, Ogun, Oyo and Abuja, as  long queues of vehicles were noticed at the weekend in major filling stations across the affected states, despite promises of sufficient petroleum products by the Nigerian National Petroleum Corporation Limited (NNPC).

EnergyDay’s check showed that marketers and other operators within the supply chains have attributed the scarcity to the rising price of diesel needed to fuel the petrol tankers to various destinations.

Our correspondent who monitored the situation at the weekend in Lagos, disclosed that  residents  of  Lagos Island, Victoria Island and Lekki spent hours at the filling stations to buy petrol for their vehicles and power their homes.
Some of the filling stations in the Lekki- Ajah axis recorded long queues, resulting in traffic lock jam in the axis. The stations as at the period of filing this report were dispensing the product at official pump price but the Managers blamed the crisis on supply shortage from the petrol terminals.
The situation was a bit tough on the Lagos Island / Obalende/ Ikoyi axis as most of the petrol stations were shut down due to shortage of the products. Long queues of motorists were also recorded in some stations while residents were seen with fuel kegs.

The situation was mild in most parts of the Lagos Mainland and suburbs, as queues of motorists were slightly building up as at the period of filing this report.
In Ogun state, most of the stations on Lagos Abeokuta axis were shut and few dispensing have jerked up prices above official pump price because of the supply shortfall.
Scarcity of the product was also high in Ibadan, Oyo state capital at the weekend as most filling stations were shut down.
The scarcity in the Federal Capital Territory, Abuja, although not new, has continued to take different dimensions everyday as residents were used to spending hours in queues and the option of buying from black marketers at very ridiculous price.

EnergyDay gathered that the situation started in 2021 after  high amounts of methanol was discovered in imported fuel. Although efforts have been made by the government to ease the situation, the issues keep taking different dimensions from supply shortages to freight rate and other associated matters.

Mallam Mele, Group Managing Director, NNPC Limited,  Kyari, had recently claimed that the country has significant product in stock, insisting that the country has about 1.79 billion litres of premium motor spirit on ground. He noted that the 24 hours loading agreement at the depots and selling at some selected petrol stations is still intact.
He noted that the increase in transporters freight rate will further encourage other stakeholders to deploy more trucks to transport PMS nationwide to ensure adequate supply of the product.

President Muhammadu Buhari had on Thursday approved a raise in freight rate for petroleum transporters above the current N25 per kilometre to enable transporters to get diesel in trucking petrol and other products.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), in a statement, said the approval was granted after due consultations with industry-wide stakeholders.
NMDPRA said the review was necessitated by the upswing in the global price of petroleum products especially Automotive Gasoil (Diesel) and its implication on the cost of transporting petrol nationwide.
“The transporters freight rate has been reviewed to reflect current market realities. The revised freight rate takes effect from 1st June 2022 while still maintaining the current regulated PMS pump price of N165/litre,” it noted.
The authority also said an inter-agency team is being constituted to reconcile and pay outstanding transporters claims under the Bridging Fund Scheme.
It however assured that NNPC Ltd, the sole supplier of petrol, has maintained over 32 days sufficiency in-country.
The Nigerian Association of Road Transport Owners (NARTO) has commended the Federal Government over the upward review of the freight rate for Premium Motor Spirit (PMS).

NARTO’s President, Alhaji Yusuf Othman, said that the review would cushion the effect of the rising cost of diesel on the operations of transporters.
He said,  “It is a very good development and it shows that the government is being proactive.

“It will go a long way in cushioning the effect of the diesel cost on our operations.

“Like we keep saying, diesel is more than 70 per cent of our operational cost. So it was certain that the high diesel cost would affect our operations.

“You cannot take products from Lagos to Abuja and other areas while running at a loss.”

He said NARTO members had been struggling to operate, adding that normalcy would soon return to the petroleum products distribution sector with the intervention.

While noting that the government was yet to communicate the new freight rate to marketers and transporters, Othman expressed optimism that the increment would help reduce operational losses.

He also assured Nigerians that the scarcity of petrol being experienced in Abuja and other parts of the country would soon abate.

The Independent Petroleum Marketers Association of Nigeria (IPMAN), South-West Zone last week claimed that its members would start dispensing petrol to customers at N180 per litre.

The zonal chairman, Alhaji Dele Tajudeen, in a statement said that the step would be taken if the appropriate regulatory agency of government failed to address the issue of irregular supply of its products to its members.

He explained that members of IPMAN in the zone had not been able to buy fuel products from any of the government depots, and had resorted to getting supplies from private depot owners, who according to him had capitalized on the situation to milk them.

Tajudeen lamented that all the depots in the zone had had overtime refused to load trucks belonging to its members since January 2022, explaining further that the private depot owners’ loading price is about N157 or N158 above the price that government depots would sell to them.

“As of today, the purchasing price of diesel has increased by 400%. Again, I want members of the general public to know that the cost of transporting the product ranges between N6 to N8 and N10 depending on where the products are being transported to from the Lagos private depot where we make purchases.”

He added, “So, by the time we add the cost of transportation to the purchasing amount, we will be arriving at a sum above N165, which is the government-approved pump dispensing price.”

“But sad enough, the regulatory agency appeared incapacitated to control and compel these private depot owners to sell at the government’s approved price for us.”

“I wish to equally intimate you that making purchases from these private depot owners is not the ultimate end, we also have some overhead costs to bear like running an electricity generator to power our filling stations; paying the staff salaries, as well as servicing the bank loans among other costs.”

Tunji Oyebanji, MD 11Plc, who was a former Chairman, Major Oil Marketers Association of Nigeria (MOMAN),  in reaction to the regular scarcity in Abuja said it is expensive to truck products from Lagos to Abuja, due to the rising cost of diesel.

He noted that the  truck drivers would prefer to load diesel than petrol. According to him, Diesel is a deregulated product unlike prices of petrol which are currently being fixed by the Federal Government.
He said, “The transporters are no longer putting all their trucks on the road again. They will prefer to ignore the person who will sell at N165, and go to another person who sells at N200 because they have added that higher cost of diesel.
“The price doesn’t reflect the market. That is why you don’t get enough trucks to go to Abuja because the enforcement of N165 is very strong in those places.
“But if it is to go to Maiduguri and other states where price control is low, you will have no problem finding trucks because prices will reflect the market there,” he said.
He noted that since NNPC is still paying subsidy on PMS, most of the products are finding their ways through the country’s porous borders to other West African countries where the petrol is expensive.
He said, “Since NNPC is the sole importer of PMS and determines the price at which the product is supposed to be sold, all our neighbouring countries that don’t have regulated prices like ours, would depend on Nigeria’s petrol.
He noted that this has encouraged all manners of people to get involved in trucking the products to different destinations. “The margin you can make if you manage to carry 50-100 litres across the border to Benin, Coutonou, Niger, Cameroun is high. You can buy at N165/litre here and sell at N400/litre there,” the 11 Plc MD said.