NNPC struggles with fuel supply amid demand surge

Sopuruchi Onwuka

Adequate supply of the premium motor spirit also called petrol has remained a lingering issue in the country as the yuletide period races in, putting the Nigerian National Petroleum Corporation (NNPC) in the eye of the storm as marketers mount pressure with effective demand.

Our field survey of the market shows low stock level across all depots in the country even though the corporation which is saddled with the role of sole importer in the market currently concentrates on process efficiency to ensure that no section of the domestic fuel market goes completely dry.

Group Managing Director of NNPC, Mallam Mele Kyari had stated in a recent conference in Lagos that the corporation has a total of 3.8 billion liters of fuel products in tank and in transit respectively; assuring that the market with would be saturated with supply before the critical traveling period between end of year and the early new year.

According to him, some 1.8 billion liters of mainly petrol is spread across the nation’s 26 distribution depots, while additional cargoes laden with 2.0 billion liters were underway to berth at the nation’s import jetties early next month.

Group General Manager in charge of Public Affairs, Mr Garba Deen Mohammed, had in a statement advised the public to refrain from panic stocking of fuel products, saying the corporation’s fuel import orders were expected to arrive the country imminently.

“It is therefore unnecessary to entertain any fear of scarcity of petrol throghout the festive season and beyond,” he advised, adding that Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has already debunked rumours of fuel price hike in the country.

Mr Mohammed was responding to reports of long queues at filling stations in Abuja and environs where the panic of fuel scarcity sent motorists crowding at service stations and causing long queues that worsen management of lean supplies in the system.

In the southeastern parts of the country where independent petroleum marketers hold sway, normalcy is returning after weeks of acute fuel scarcity as members of the Independent Petroleum Marketers Association of Nigeria (IPMAN) shut down retail outlets to protest lean allocation of supplies.

The suspension of services by the group had sent the prices of petrol soaring to as high as N300 per liters in states like Abia, Anambra and parts of surrounding states.

In Lagos and other southwestern states where both the NNPC and major marketing companies locate their distribution and storage facilities, both fuel queues and prices have remained stable even with few retail outlets running out of stock.

A procurement manager in one of the major marketing companies in the country told The Oracle Today that purchase orders at NNPC storage facilities are not met even when full payments were demanded and fully made.

“After payment, all we get is about 50 percent of what we paid for. Now the rationing is even worsening because they (NNPC) are now dealing with us as groups despite the fact we transact with them individually,” our source lamented.

He confirmed low stock level at all distribution depots operated by NNPC in the country, saying that if the new cargoes do not arrive as promised by the corporation, then the market situation would be very precarious as we approach the high demand yuletide period.

“We hear that they have cargoes that are expected to berth in weeks, but if anything happens and the cargoes do not reach in time then there would be crisis. No two ways about it because NNPC is the currently the sole importer,” our source said.

Erstwhile Chairman of the Major Oil Marketers Association of Nigeria (MPOMAN), Mr Tunji Oyebanji, declared at a recent conference in Lagos that the best way to permanently heal the market of scarcity and distortions is to deregulate and liberalize.

He said price deregulation and supply liberalization would provide the needed commercial incentives for new investments in local refining and private distribution infrastructure. He called for policies that confer risk bearers with the advantage of business lucre.

However, Mr Garba Deen Mohammed stated that “the NNPC is also engaging all stakeholders to ensure smooth supply and distribution of products to every part of the country during the festive season and beyond.”

The Oracle Today reports that despite the passage of the Petroleum Industry Act 2021 by the National Assembly, the NNPC is working out deregulation implementation strategy with relevant stakeholders, including the organized labour, to guarantee displacement of import with local refining.