For Nigeria to get it right, it won’t be easy. No good thing comes easy. To fail takes courage of attempt. We’ll get it right someday, and it’s closer now than ever. Following the skyrocketed price of Premium Motor Spirit, much known to you as petrol, which has met with several reactions spurred by frustrations; the Independent Petroleum Marketers Association of Nigeria – (IPMAN), has joined the bandwagon with threat to stop operations nationwide.
IPMAN revealed on Thursday that the cost of petrol from the Dangote Petroleum Refinery to NNPC was about N898/litre, but noted that NNPC was selling the same product to independent marketers at N1,010/litre in Lagos.
It may interest you to know that IPMAN controls over 70 per cent of filling stations nationwide, and has kicked against the hike with a threat to down tools, while also demanding a refund from NNPC for earlier petrol supply payments made by its members. This development may further worsen the petrol scarcity and queues in many parts of the country.
Meanwhile, it was also gathered on Thursday that members of the Major Energies Marketers Association of Nigeria were still loading subsidised petrol from Dangote refinery, based on earlier arrangements with NNPC.
The National Publicity Secretary of IPMAN, Chinedu Ukadike, was quoted to have said the association may be forced to take action if the challenge between IPMAN and NNPC is not resolved immediately, according to Punch.
This development followed an earlier revelation by IPMAN national president, Abubakar Maigandi, that NNPC was asking independent marketers to buy petroleum products from its depot at N1,010/litre in Lagos State.
Maigandi, who spoke during a live television interview on Thursday, argued that the price was higher than what NNPC paid for the product from the Dangote refinery.
He also noted that independent marketers’ funds had been held by the national oil company for about three months.
According to him, NNPC purchased the product from the refinery at N898/litre but is asking marketers to buy it at N1,010/litre in Lagos; N1,045 in Calabar; N1,050 in Port Harcourt; and N1,040 in Warri.
He also pointed out that the association’s funds with NNPC had reached N15bn, stressing that marketers were eager to be fully involved in the petrol business and its components following the full deregulation of the sector.
He added, “Marketers want to be fully engaged in the business of petrol and its components. NNPC has been the one bringing in the product and loading and has an off-take in the Dangote refinery.
“We are now being allowed to import and there is no challenge on that issue. What we are after is to get the product directly from Dangote and not through NNPC. Currently, they owe us up to N15bn.”
On Wednesday, the retail stations of NNPC raised the price of petrol to N1,030 from N897/litre in Abuja, and in Lagos it was hiked to N998/litre from N868/litre. Other locations witnessed similar price hikes, a development that triggered anger among Nigerians.
The price hike, the second in one month, represents about 14.8 per cent or N133 rise. However, the Nigeria Labour Congress and the Organised Private Sector called for the immediate reversal of the hike in the pump prices.
With the latest price adjustment, it means that in less than 17 months of the current administration, the price of petrol has risen by over 430 per cent from May 29, when it took over the reins of power.
Asked if NNPC had reached out to resolve the issue with independent marketers, the National Publicity Secretary of IPMAN, Ukadike, responded in the negative.
He said the oil company had not provided any feedback or response following its last discussion with the marketers.
Ukadike said, “No changes or feedback at all. NNPC hasn’t responded to us. They haven’t returned our money. We are still observing what the situation would turn to since they haven’t reached out to us, or probably we would have to withdraw our services if the issue is not resolved.”
He, however, noted that efforts to reach Dangote for direct loading were in progress and a meeting between both parties expected to hold soon.
Ukadike also disclosed that its marketers would sell at a lower rate of N970/litre if allowed to purchase products directly from the Dangote refinery.
The IPMAN official added, “Any moment from now, Dangote will invite us, from the fillers we have received.”
Phone calls and messages to NNPC officials to respond to the position of IPMAN were not replied as of the time of filing this report.
Similarly, officials at the Dangote refinery did not respond to enquiries when contacted for their views on the issues raised by IPMAN.
On the contrary, the Major Energies Marketers Association of Nigeria said it is not owed by NNPC, as it owns a large stock of storage systems to mitigate against sudden changes in petrol prices.
The Executive Secretary, MEMAN, Clement Isong, in a telephone interview, attributed this situation to its continuing relationship with NNPC.
He said, “We have storage tanks, unlike other oil marketers that only have trucks to transport directly to their filling stations. MEMAN is integrated. We have storage tanks, trucks and we have filling stations. So, we have products that we have bought into our storage tanks, which is a big difference from people who buy and take them straight to the station. They don’t have additional storage. We have depots and it takes a little bit longer for us to run out of stock, so we don’t face the challenge of being owed by the NNPC.
“We have a continuing relationship with NNPC and it is not the first time prices have gone up or down. That relationship means that when prices go up or down, we adjust. And so they continue to supply us. Everybody will charge its price according to its business strategy to optimise costs.”
Subsidised Petrol
This came as a major oil marketer revealed that members of the group were still loading subsidised petrol from Dangote refinery, which they had earlier paid for through NNPC.
Major marketers had announced that NNPC sold petrol to them at N766/litre when it started lifting the product from Dangote refinery. Due to the capacity of the major marketers to buy the product in large volumes, they paid for the commodity massively and are still loading it from the Lekki-based refinery.
“The loading of this product may continue till the next two weeks before it will be exhausted and we will now start buying directly from Dangote without going through NNPC again,” a major dealer submitted.
Another dealer provided further explanation on the new petrol pricing regime in Nigeria, saying, “I believe the price of PMS has finally been deregulated, and subsidy has finally been eliminated. Henceforth, the price of PMS will be determined by market dynamics. This is inevitable as the government could no longer bear the burden of the subsidy.
“A good measure the government has taken to mitigate the development is the sale of crude oil to local refineries in naira at a fixed exchange rate. This will protect consumers from the negative impact of the fluctuations in exchange rates. The fact that the crude will be refined in local refineries will also save the cost of transporting crude to offshore refineries and transporting refined products back to Nigeria. Without these two factors, prices would have been higher.
“Another thing will be that the incentive to smuggle petrol from Nigeria to our neighbouring countries will be greatly reduced. Henceforth, prices can change at any time, depending on market dynamics. Customers will make informed choices about where to buy from. Operators will need to improve on safety, customer service, and accurate measurement to retain customers. This is also the time for consumers to consider alternative sources of powering their vehicles like CNG.
“The era of full competition has come to Nigeria. With time, things will settle down, and people will make informed choices. The government should invest in mass transportation, especially with CNG buses. Greater incentives should be given in terms of duty waivers on conversion kits and other CNG equipment and vehicles.”
Meanwhile, the landing cost of petrol has dropped to N975.89/litre, according to the latest data released by the Major Energies Marketers Association of Nigeria, MEMAN.
Crude oil prices and foreign exchange rates are the major factors determining the cost of refined petroleum products, including petrol, diesel, aviation fuel, and kerosene.
On Thursday, Brent crude futures settled at $77.41 a barrel, falling 60 cents, or 0.8 per cent. US West Texas Intermediate futures settled down 33 cents or 0.5 per cent, at $73.24 a barrel.
The decrease in the landing price is supposed to lead to a corresponding reduction in pump prices at filling stations across the country pending the cost of transportation, storage and distribution.
MEMAN data also revealed that the landing cost of Automative Gas Oil, also known as diesel stood at N1,076.35/litre, while that of Aviation Turbine Kerosene (ATK), known as aviation fuel stood at N1,111.97/litre.
Filling stations in the Federal Capital Territory sold between N1,025 and N1,120 in different locations.
- Total Energies, located at Sultan Abubakar Way, Zone 3, sold the product for N1,080.
- Eterna filling station at Obafemi Awolowo Way, Utako, sold at N1,120.
- Shafa filling station, located along Airport Road, sold at N1,050 while,
- NIPCO and Mobil fuel stations, both located along Airport Road, also sold the product at N1,025 per litre.
This development followed NNPC’s decision to terminate its exclusive purchase agreement with Dangote Refinery.
In light of the recent fuel price hike, concerns are mounting over its potential impact on Nigeria’s economy.
A concerned Nigerian emphatically analyse the ripple effects of the fuel hike, deducing that; “People and businesses will become increasingly burdened. The rising costs are not just about fuel; they also frustrate production processes across various sectors, he said.
“If the current trend continues, we could see millions of Nigerians facing poverty as essential goods and services become less accessible.”
Regarding the impact on small businesses, he expressed grave concerns.
“Many small enterprises operate on thin margins. With the higher costs of doing business, we risk seeing a significant number of them collapse, which could exacerbate unemployment and economic instability.”
Unekwu’s insight underscores a challenging road ahead for Nigerians as they navigate the complexities of rising costs and their implications for individuals and businesses.
Many economy experts has weigh-in on the reality on “Small and medium enterprises, holding that SMEs will eventually have to adjust to the new prices, and ordinary people will suffer as a result.”
It was suggested that businesses sought alternative energy sources.
“The over-reliance on PMS as an energy source has not benefited small and medium-scale enterprises in Nigeria. For instance, a barbershop that relies on a generator finds it increasingly unsustainable due to fuel costs,” some deduced.
“Businesses should consider alternative energy sources, such as solar power, although it’s not cheap. Many small enterprises find themselves in a dilemma, having to choose between electricity, generator fuel and solar.”
In conclusion, every suggestions by renowned Nigerians points to deploying alternative option, and of course, CNG takes the lead.
