UPDATED: Fuel scarcity heightens, NNPCL retail adjusts pump price to N194, as MOMAN, IPMAN blame product shortage, high forex rates

…marketers recommend full deregulation of downstream sector, petrol subsidy removal

Oredola Adeola

The lingering scarcity of Petroleum Motor Spirit (PMS) also known as petrol, across the country has worsened in Lagos, Abuja, and other major cities across Nigeria, as motorists spend long hours in filling stations, thereby driving up costs of basic items including transportation to unprecedented levels not seen in recent times.

Consequently, the Nigeria National Petroleum Corporation Limited retail outlets and Mega stations across in Abuja have adjusted their machine to reflect the N194/litre pump price up from N169 as of Friday evening. The NNPCL retail outlets in Lagos have also adjusted their machine to reflect for N184/litre.

GarbaDeen Muhammad, Group Corporate Communications officer of the NNPCL, in a statement responding to the price adjustment, said that the national oil company is a commercial entity and not responsibility to determine petrol prices.

Meanwhile, the Major Oil Marketers Association of Nigeria (MOMAN) and the Independent Petroleum Marketers Association of Nigeria (IPMAN) in separate statements issued on Friday, attributed petrol scarcity and attendant long queues across the country to the exceptionally high demand and bottlenecks in the fuel distribution chain.

According to MOMAN, the crisis was majorly caused by the shortage and high (US Dollar) cost of daughter vessels used for ferrying petrol from mother vessels to depots along the coast.

The major marketers in the statement sent to EnergyDay said that the other issue responsible for the fuel crisis is the inadequate number of trucks to meet the demand to deliver products from depots to filling stations nationwide.

MOMAN said, “These high logistics and exchange rate costs continue to put pressure on prices at the pump.

“Over the past three months, staff & management of MOMAN companies have worked diligently at depots and filling stations to relieve the stress faced by customers through the Christmas and New year period.

“Our members have again agreed to extend depot loading hours as well as keep strategically situated service stations open for longer hours to ease access to fuels for our customers.

“MOMAN shall continue to use its best endeavours to ensure that product is sold at the pump at prices currently approved by the Regulatory Authorities, despite pressure on price by demand and costs in our immediate operating environment.

Recommending the final solution to the challenges, MOMAN revealed that the Nigerian Government must go ahead with the end goal of ensuring full deregulation of the petroleum downstream sector to encourage liberalization of supply and long-term investments in distribution assets.

EnergyDay noted that MOMAN members have continued to sell at N170 per litre, after picking the product directly from the NNPCL at an adjusted deregulated price of N148/litre. This has however not guaranteed availability as the crisis has continued to linger.

Mr. Zarma Mustapha, IPMAN Deputy President, in a conversation on Channels Television’s flagship programme, Sunrise Daily, said that Nigeria is in a “complex situation due to the burden of petrol subsidy that the government is carrying”, which he said was no longer sustainable due to “paucity of the funds”.

According to Mustapha the supply that IPMAN members and other independent marketers receive at the loading points are not sufficient to go round. He said, “We believe we don’t get even up to 50 percent of what we usually evacuate from the depots.

“In July, August, the volume of product liftings we had and what we have today has dropped by about 50 percent or 40 percent. It doesn’t seem that they are bringing in more. If they’re bringing in more, we would be having the same volume that we usually get at the loading point.

“As of today, with what is trending at the private depots, the volume available is not enough. The private depots also contribute by not giving the product as it is being regulated by the NNPC.”Mustapha mentioned that “Nigeria is in a very dicey situation.”

He noted that the NNPC imports and distributes to private depots.  “Note that we independent marketers don’t have the depots. At the moment, I bought the product from a depot in Lagos at N247 per litre to be transported down to the far North at the cost of N50 to N60 per litre. This is ridiculously high and not the fancy prices we are seeing.

“The independent marketers do not even understand the situation any longer. Several concerns have been raised to the relevant authorities and regulatory bodies in relation to our experiences with the crisis.

“We are supposed to get this product at N148 but we are buying at N22o and it keeps increasing. 240 in Lagos, 235 in Warri, 240 in Port Harcourt, in Calabar it is as high as N250 per litre for marketers, and you buy and transport yourself to where your retail outlet is.

“There are a lot of confusions in the industry, and the government must come in and address these confusions so that the common man can get the product for the approved price. We cannot buy a product between 220 to 240 naira, transport it for about N50, which is already N300, and then expect the marketer to sell to the public for N200 or N190. It is not realisable.”

The IPMAN deputy President however warned that persistent scarcity will worsen in days to come, insisting that it will definitely continue until when the government is able to develop local refineries to a level that can meet the needs of our people.

Nigerian National Petroleum Company (NNPC) Limited and Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) have refused to issue statement to explain reason for the persistent scarcity despite claiming the availability of about 1.9 billion litres of fuel in storage.

HIKE IN COST OF TRANSPORTATION, OTHERS

Commercial transporters have increased the cost of transportation across major routes in Lagos due to scarcity of petrol and insufficient supply of the product by marketers in all the filling stations.

EnergyDay gathered that the cost increased to more than 300 percent, as most commuters in Lagos state complained about the amount they paid on transportation last year, to move from one destination to the other in the state, with corresponding increase at the moment, on cost of food item and other essentials.

Ayinde Mukaila, a commercial bus driver who operates from Oshodi to CMS, said he has been buying petrol for N400 per litre from black marketers since most filling stations have refused to operate due to product shortage.

He noted that those filling stations selling for N170pl had long queues, while other independent marketers sell about N280 pl but sell at their convenience, which he said does not go well with the commercial bus operators.

Emeka Uzodima, a resident of Ayobo, in Lagos, told our correspondent that he has been paying double daily to get to Victoria Island where he works.

According to him, last December, I spent an average of N4000 to-fro Ayobo-VI, but the situation has changed, because I have been spending about N6000 daily on transportation, whereas my salary has not increased.

Teslim Olajide, an IT expert said that the fuel scarcity has crippled business activities in the state. According to him, I spend N7000 daily to commute from Apapa to VGC daily. Olajide added that he spends more money on energy including fueling his office’s generator on a daily basis.

He lamented that if the situation is not addressed urgently, Nigerians may be forced to seek alternative means of surviving the hardship, which according to him could escalate rate at which young people are permanently travelling out of the country for greener pasture.