Petrol Scarcity Looms as Product Sells for N142 per Litre in Depots

Petrol Scarcity Looms as Product Sells for N142 per Litre in Depots

Despite the pledge by oil marketers to support the federal government’s efforts in ensuring sustained and stable supply of petrol at the official pump price of N145 per litre, there are indications of imminent scarcity as some depot owners have jerked the ex-depot price to N142 per litre, against government’s approved N123.28 –N133.28 per litre ex-depot price band.

Rising from a two-day consultative forum of the downstream petroleum sector, which was recently convened by the Chief of Staff to the President, Mallam Abba Kyari, the marketers had restated their commitment to the N145 pump price and also pledged to ensure significant reduction in the price of diesel.

On May 11, 2016 when the current retail price band of N135 – N145 per litre took effect, the Petroleum Products Pricing Regulatory Agency (PPPRA) had fixed the indicative ex-depot price at N123.28 –N133.28 per litre for product that is in the depots, via circular No. A.4/9/017/C.2/IV/690.

However, for petrol that is still in the mother vessel at the high sea, the ex-depot price was fixed at N116.63 –N126.63 per litre as the marketer will incur additional expenses to hire daughter vessels to lift the product to the depots.

But investigation revealed that only six members of the Major Oil Marketers Association of Nigeria (MOMAN) – Forte Oil, Total, Mobil, Conoil, MRS and Oando- are loading petrol at government’s approved ex-depot price.

It was, however, gathered that the MOMAN members do not sell the product to other marketers but only to their own dealers and retail outlets.

According to THISDAY’s investigation, majority of the independent marketers and depot owners sell above the official ex-depot price range, thus making it impossible for the retail outlets to sell at N145 per litre and break even.

Investigation further revealed that the ex-depot price in most of the depots ranges between N136, 139, 140 and N142 per litre.

It was further learnt that virtually all the product in the private depots is sourced from the Nigerian National Petroleum Corporation (NNPC) as Total Nigeria Plc is the only private marketer known to have imported petrol in the past two weeks, according to marketers who spoke to THISDAY.

THISDAY learnt that NIPCO Plc, which also sells product to all marketers at government’s approved price, does not have petrol in its depot.

When THISDAY visited the company at the weekend, there was a notice to marketers by the company that it could not guarantee when product would be available.

Some of the marketers, who spoke on condition of anonymity, told THISDAY that N145 per litre pump price was no longer sustainable as a result of the hike in ex-depot price.

“By the time you pay the union fees, which amount to over 50 kobo per litre; you pay the driver, cost of diesel for fuel, plus the extortion by security agents, you will end up at a huge loss,” said one of the marketers.

Following the hike in ex-depot price, the South West Zone of the Independent Petroleum Marketers Association of Nigeria (IPMAN) at the weekend threatened to stop lifting petrol from the depots.

The meeting of the downstream players convened at the instance of the Presidency, reviewed the state of the downstream sector and addressed issues that may impede the uninterrupted supplies of petroleum product leading to price distortions.

In attendance at the forum were Kyari; Minister of Finance, Mrs. Kemi Adeosun; Minister of State (Aviation), Senator Hadi Sirika; the Central Bank of Nigeria (CBN) Governor, Mr. Godwin Emefiele; Group Managing Director of NNPC, Dr. Maikanti Baru; Director-General, State Security Service (SSS), Mr. Lawal Daura; as well as the chief executive officers of major marketers, depot owners and independent marketers.

“Discussions focused on designing proactive measures that will balance supplies and maintain the fixed pump price of N145 per litre for petrol. Furthermore, deliberations also extended to creating an affordable and stable price regime for deregulated products such as diesel and aviation fuel, which in recent times have been volatile,” MOMAN said in a statement at the end of the meeting.

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