Fuel marketers close shop to demand price increase

Sopuruchi Onwuka

A segment of players in the domestic fuel market have started practical demand for price increase by shutting their retail outlets and creating panic among motorists over possible hiatus in the distribution system.

Panic buying by desperate motorists led to long fuel queues at filling stations operated by major oil marketers on Monday as most independent marketers closed shop.

Our efforts to reach market regulators for explanation on the prevailing events in the market were not successful as the responsible officials authorized to speak on the matters were said to be in a very big meeting that lasted the whole day.

However, we gathered that some members of the Independent Petroleum Marketers Association of Nigeria (IPMAN) and sister Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) resolved to protest thin operating margins in the market by shutting their retail outlets.

The marketers have at various meeting and conference demanded increase in retail prices of the product from the current N165 per liter recommended by the market regulator, Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

They have regularly argued that the margin allowed for marketing companies at retail price of N165 per liter was too small to cover cost of operations.

The Oracle Today reports that despite their protest over thin margins, the marketing companies most which are listed on the bourse of the Nigerian Stock Exchange (NSE) have continued to declare hundreds of billion Naira in earnings and profits.

The members of IPMAN and DAPPMAN form the largest number of market players with most widespread retail outlets in the country; and withdrawal of their services will directly result in acut fuel supply shortage in the economy.

Mr Akin Akinrinade, Chairman, IPMAN, Lagos Satellite Depot, Ejigbo, told newsmen that while the government had fixed N165 per litre as the pump price of Premium Motor Spirit (PMS), the current realities in the market showed that the minimum the product should be retailed at the stations should be N180.

He said the current scarcity being witnessed in Lagos is because majority of petrol stations in the state are owned by IPMAN members who are finding it difficult to operate in a hostile environment.

He said :“As you can see, the queues are back and this is the second time we are witnessing it this year. However, this one is peculiar in the sense that for a particular reason, IPMAN members decided to shut their stations. This is not because we are on strike, but because we can no longer do business under this condition.”

He maintained that IPMAN members ought to be getting supply from the Pipelines and Product Marketing Company (PPMC) and had made payments of over N1 billion since October 2021.

According to him, the products were yet to be delivered forcing members to patronise private depots for products while at the same time servicing loans borrowed from banks for their money with PPMC.

He added: “Now, these private depot owners have increased the ex-depot price of PMS from N148.17 to N162 per litre. That is the amount they are selling to us. When you factor in the handling charge, transportation and running cost of our stations, you will see that even within Lagos, the minimum we can retail petrol is about N180 per litre. We want Nigerians to know that IPMAN members are patriotic citizens and we are not out to sabotage the effort of government because we know this hike in petroleum products prices is not peculiar to Nigeria.

” The ongoing conflict between Russia and Ukraine has disrupted the supply chain and the Nigerian government is doing its best to mitigate its impact on our nation.” He, therefore, urged the government to direct the private depots to revert to the old ex-depot price for PMS or deregulate the downstream sector to allow market forces determine the price.

He also advised the government to expedite action on the rehabilitation of the nation’s refineries in order to increase the domestic refining capacity.

He further advocated the need for the resumption of pumping products through the PPMC Ejigbo depot, which would enable IPMAN members get supply at a cheaper cost. Majority of the filling stations were not selling petrol. Long queues were seen at the few stations selling with both private and commercial motorists complaining about the situation.

Zonal Operations Controller NMDPRA, Mr Ayorinde Cardoso, however advised the public not to engage in panic buying, saying that there is sufficient fuel at the depots and jetties.

He said the Nigerian National Petroleum Company (NNPC) Limited have a total of 234,920,127 litres of PMS in various depots in Lagos. “In addition, we have four vessels in Lagos jetties discharging 186,753,650 litres of PMS.