Some filling stations in Lagos, Abuja, Niger and other states dispensed Premium Motor Spirit at between N200/litre to N250/litre on Sunday, higher than the government-approved retail price of N165/litre, as queues for the product extended to more states.
It was gathered that the worsening queues for petrol in Lagos and neighbouring states, as well as its prolonged persistence in Abuja and environs, were due to the insufficient supply of products by the Nigerian National Petroleum Company.
NNPC is the sole importer of petrol into Nigeria for several years running. It often claims to have enough products to keep the country wet for months. It, however, stayed mute on Sunday when contacted.
Our correspondents gathered that some filling stations in Lagos sold petrol to motorists at N200/litre and still had queues, as black marketers dispensed the product at N300/litre.
In Abuja, Khalif filling station in Kubwa, dispensed the commodity at N250/litre on Sunday but had N165/litre displayed on its pumps. But once a motorist tells the fuel attendant the amount he or she wishes to buy, this would be calculated based on N250/litre.
The queues for petrol in Abuja has never ceased since February this year, but it grew worse in neighbouring states of Nasarawa and Niger on Sunday as motorists search for PMS to move around during the Sallah break.
Oil marketers denied claims of product hoarding or diversion, as they stressed that the insufficient supply of PMS by NNPC and the non-payment of bridging claims for the transportation of petrol were the key reasons for the scarcity.
The President, Petroleum Products Retail Outlets owners Association of Nigeria, Billy Gillis-Harry, told our correspondent that filling stations that had products were dispensing, while those that were shut had no petrol to sell.
He said, “The problem is that every side needs to be transparent. We as retail outlet owners are ready to sell petroleum products to the teeming Nigerian public. We have no reason why we should not sell our products.
“The money used in buying the 45,000 litres of petrol from depots, almost N7m, is borrowed, and time-bound. So every retail outlet owner knows that the wise thing to do in this business is to sell out and try to turn around that sale as many times as possible.
“So with this scenario in view, there is no retail outlet owner that is hoarding product or diverting it. Yes, we know there may be bad eggs among the good bunch, but the fact that we are not having sufficient products is what has remained the cause of fuel scarcity.”
Gillis- Harry added, “In the case of Abuja, it is clear to understand that if the bridging claims are paid to marketers, they will be able to continue their products’ purchase cycle. That is just the reality. So payment of bridging claims is an issue and insufficient supply is also another issue.
“This is because if there is product and there is money for us to buy, then why won’t we buy and sell? What else are we in business for? Are we going to buy products and keep them? The answer is no! So this is the reality.”
On what could be the solution to the current crisis in the downstream oil sector, the PETROAN president stated that everything still boiled down to the need to end the current fuel subsidy regime.
He said, “There is a solution and it is simple. The subsidy that is being paid should be stopped. The money should be channeled to other developmental infrastructures such as health, education, etc.
“And since the refineries have not been fixed by the government, they should either give it wholly to private sector practitioners like PETROAN that own the retail outlets to manage.”
The NNPC stayed mum when asked to react to claims of insufficient supply of petrol by the national oil company. Its spokesperson, Garba-Deen Mohammad, did not answer calls and had yet to respond to a text message sent to him on the matter.
Fuel price hits N200/litre in Lagos, scarcity persists
Further checks show that some filling stations in Lagos and Ogun states sold fuel at N200/litre.
While many stations were under locks and keys despite a promise by the NNPC to keep the country wet, many among the few that had products were seen dispensing above N200/litre.
According to findings, the Federal Government and oil marketers are yet to come to a compromise on how much a litre of petrol should be sold, and marketers are beginning to sell products at prices not approved by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
The continuous rise in prices comes on the heels of recent threat to withdraw the licenses of marketers that sell above official price of N165/litre issued by Chief Executive, NMDPRA, Farouk Ahmed.
A source close to the matter had told Our correspondence that marketers met with Ahmed in Abuja last week, where he pleaded with them not to increase their pump price.
“The meeting was held with NMDPRA last week, and Mr. Farouk begged marketers not to increase the price. But the long queues you are seeing are due to inadequate supplies. Marketers have also gone ahead to increase prices unofficially due to high operational costs. There was no formal letter to the effect though. It was just a word of mouth agreement to increase price between N175-N180 per litre”, our source said.
He advised the government to issue a statement on the marginal increase in the pump price of petrol.
Executive Secretary of the Major Oil Marketers of Nigeria, MOMAN, Clement Isong, declined to comment on the causes of the rising petrol prices.
Our correspondence had recently reported that oil marketers were currently pushing for compensation from the Federal Government if petrol would remain at N165 per litre.
Among other things, marketers are lamenting high operational costs due to rising diesel price which is currently being sold above N800/litre at depots. There are fears that diesel prices could hit N1500/litre if nothing is done to tame prices.
The National Operations Controller of Independent Petroleum Marketers Association of Nigeria, Mike Osatuyi, however, debunked allegations that NMDPRA and marketers secretly agreed to increase the price.
“That’s not true. There is no letter to that effect from NMDPRA,” he said.
However, when asked why the fuel price was rising, he said it was due to the hike in the price of diesel.
“Those stations you see that sell above N165 do so because they have to recover their costs,” he said.
On when the Federal Government would pay marketers the promised bridging claims, he said the payment process could stretch till July ending.
“Marketers are just submitting their claims and they will be verified first. So payment could be by the end of July,” he said.
Reacting to the continuous price face-off between the Federal Government and marketers, industry analyst and former Group Chairman/CEO, International Energy Services Limited, Dr. Diran Fawibe, said the issue of fuel supply appeared to have defied solutions.
“Everybody is throwing figures about costs and prices to sell and what not to sell. At the end of the day, it’s the consumers that will bear the brunt. What we have noticed is that prices vary from station to station, and from state to state, and obviously, that’s what the bridging payment by the Federal Government was supposed to address”, he said.
On his part, Chief Executive Officer, Centre for the Promotion of Private Enterprise and former Director-General, Lagos Chamber of Commerce and Industry, said the current price was not sustainable.
According to him, the government is not in any way in the best position to control the prices of petrol if it cannot control diesel prices.
Commuters groan as transport fares rise
Meanwhile, findings by our correspondents show commercial buses have increased transport fares significantly, following the development.
According to residents from Alagbole-Akute axis of Ogun State, transport fares have increased by 50 cent – 100 per cent with bikes and buses becoming scarce. The residents blamed the situation on the fuel scarcity that has begun to manifest as long fuel queues and the reduction in the number of bikes plying the area as a result of the Sallah break.
One resident, who identified himself as Tayo Okediji, said, “Alagbole to Berger was between N200 and N300 today. There are more commuters on the roads because most of the bike operators are observing the Sallah break, and the few available ones have hiked the price. According to them, there is no fuel.”