Owing to the $6 billion debt to petrol suppliers, lack of liquidity and other issues that have put pressure on the Federal Government’s capacity to sustain the importation of the product, there is a high probability that the petrol shortage in the country will not end soon
This is even as oil marketers said they had not been able to import the product due to the high foreign exchange rate of $1,500/$, which has increased the landing cost of the product to more than N1,100 per litre.
Meanwhile, according to Vanguard report, the Nigeria Employers Consultative Association, said yesterday that the economy continues to struggle due to fluctuations in the foreign exchange market, continued low crude oil production, and a high monetary policy rate that constrained business activity.
It was gathered that under the current arrangement, major marketers, their dealers, and depot owners get the product at about N560 per litre and sell it to independent marketers for between N670 and N680 per litre.
The independent marketers that incur the cost of transportation to many parts of the nation, including the outskirts, sell the product to off-takersat between N700 and N900 per litre, depending on location.
There were long queues at the few filling stations that opened to customers, yesterday, while several without the product shut their gates.
Debt to petrol suppliers affects sustainability — NNPC
Reacting to the development yesterday in a statement, the Chief Corporate Communications Officer, NNPC Ltd, Olufemi Soneye, stated: “NNPC Ltd has acknowledged recent reports in national newspapers regarding the company’s significant debt to petrol suppliers.
‘’This financial strain has placed considerable pressure on the company and poses a threat to the sustainability of fuel supply.
‘’We are actively collaborating with relevant government agencies and other stakeholders to maintain a consistent supply of petroleum products nationwide.”
NNPC admits $6bn debt to petrol suppliers
The Nigerian National Petroleum Company Limited, NNPC Limited, also yesterday admitted that it was owing its petrol suppliers a substantial amount.
The company’s Chief Communications Officer, Mr Olufemi Soneye, in a statement, said the debt has posed a significant financial strain on NNPC operations.
Subsidy to hit N5.4trn in Dec
NNPC’s financial forecast has it that the total petrol subsidy bill from August 2023 to December 2024 will reach N5.4 trillion.
According to NNPC, the removal of the petrol subsidy in June 2023 initially led to monthly savings of N400 billion for the federation, enabling the company to remit N2.032 trillion in taxes and royalties by January 2024.
However, the NNPC’s costs importation turned negative in August 2023 and rose to N5.41trn by April 2024 because of the devaluation of the naira.
We have no access to bulk petrol supply — IPMAN
Similarly, the Independent Petroleum Marketers Association of Nigeria, IPMAN, cried out yesterday over its members’ exclusion from direct supply of petrol from NNPC Limited.
The independent marketers said in the absence of direct bulk supply from NNPC, its members had had to source products from private depot owners at exorbitant rates.
IPMAN Public Relations Officer, Chief Chinedu Ukadike, who spoke exclusively to Vanguard, said until independent marketers who operate the majority of petrol stations across the country were able to get direct supply from NNPC, it would be difficult to end the lingering fuel queues that had lasted over two months.
He explained that while petrol products had started arriving at ports in Warri, Port Harcourt and Lagos, IPMAN members struggled to access the product.
“For some weeks now, products have not been supplied to IPMAN members. We have been buying from other tank farm owners and major marketers. But recently, products have started coming in. We are aware that they are receiving products now in Warri, Lagos and Port Harcourt, and marketers’ barge will soon come out.
‘’If IPMAN members can holistically be allocated the product, all these issues of profiteering and bottlenecks will be resolved. This is our constraints and there is nothing we can do than go to other tank farms to see if we can get product from them.
“So, we don’t have access to our own petroleum products and allocations have not been given to us,” he declared.
Ukadike assured that if the bottlenecks were resolved, there would be products at affordable rates.
Speaking on why the cost of obtaining the product from the private depots was high, he said: “The price varies, depending on how scarce the product is.
‘’When the product is scarce, the tank farm owners normally sell to their own filling stations. So, what we now do is to go to their filling stations where there will be a surge of trucks waiting to be discharged to see how we can be able to lobby and pay extra money to get petroleum products.
‘’Likewise for NNPC. Once you go to their filling stations, you will see a surge of trucks, over 6-7 trucks parked by the side waiting to be discharged. So, we are no longer independent marketers; we are now dependent marketers. Independent marketers are not really captured in terms of the distribution of the chain”.
He explained that before now, it costs about N500,000 to bring a truck from the coastal depots to Abuja but noted that cost has escalated to about N3.5 million due to the high cost of diesel, truck maintenance and bad roads.
Oil marketers had recently advocated a reduction in the pump price of diesel to N700 per litre to help improve the distribution of petrol across the country.
The President of the Natural Oil and Gas Suppliers Association of Nigeria, NOGASA, Mr. Benneth Korie Doi, stated in Abuja that the high cost of diesel used by trucks was a significant barrier to the efficient distribution of petrol nationwide.
Mr. Doi had said: “Regarding the prices of Automated Gas Oil, AGO, with Dangote’s refinery production and crude oil transactions in naira, we expect a reduction in AGO prices. NNPC should leverage its shares in Dangote’s refinery to drive down these costs, which will, in turn, lower transportation expenses and reduce market prices.”
He emphasized the need for the government to create a competitive downstream sector in the petroleum industry, arguing that monopolies were detrimental.
“We must foster a competitive environment to ensure the healthy circulation of petroleum products. I commend Aliko Dangote for his monumental contribution to our industry through the establishment of the largest refinery in Nigeria.
“This development promises substantial benefits, including enhanced supply, increased competition, and a boost to our national economy and currency.
“To ensure balanced distribution, I urge that Dangote’s refined products be made available to a broader range of stakeholders, including NNPC Trading, NNPC Retail, DAPPMAN, MOMAN, IPMAN, PETROAN, and NOGASA. This inclusivity will facilitate sustainable and widespread distribution across the country,” he said.
