Fuel scarcity: Marketers blame import bottlenecks, unstable FOREX
Oil & Gas

Fuel scarcity: Marketers blame import bottlenecks, unstable FOREX

By Our Correspondent

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has attributed import bottlenecks and showering foreign exchange challenges to the current scarcity of petrol.

Mr Mike Osatuyi, the Operations Controller of lPMAN, announced this to newsmen in Lagos on Sunday.

Osatuyi said this became necessary to inform the general public against the backdrop of lingering fuel scarcity in the country.

He, however, called for total deregulation of the downstream sector to ease petrol importation.

According to him, marketers are experiencing scarcity because there foreign exchange is making importation of petrol difficult“

“A litre of petrol at the private depot is currently between N205 and N210, as against  N162.50.

“The Nigeria National Petroleum Corporation (NNPC)Ltd., is the sole importer of refined petroleum products and it’s not readily available to marketers,” he said.

The controller noted explained that IPMAN members were buying petrol above N200 per litre from private depots.

“This makes it impossible for independent marketers to sell at a regulated pump price lower than what they buy.

“Besides, such a trend is unsustainable, given that private depots also sell the product at an unofficial rate from that of NNPCL.

“When we add the cost of transportation and levies it will run into N217 per litre.

“At what prices do you want marketers to sell, knowing well that we are in business to make profit?

“My members are groaning over the increase in the cost of petrol from the depot and the suffering in getting it.

“If fuel is there, why will we not sell but no fuel?

“Our members are currently selling petrol between N230 and N240 per litre in filling stations,” he added.

Osatuyi said that the causes of constant petrol shortages across the country were myriad.

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He identified low and irregular importation of petrol by NNPCL and pricing as the major challenges.

Inadequate Importation of Petrol by NNPCL

The independent marketers have alleged that NNPCL had stopped importing enough petrol to meet demand in the country.

Osatuyi said that marketers could no longer sell at regulated prices because the unsteady supply of petrol had resulted in higher prices at the depots.

“Consequently, we are compelled to sell at higher prices to cover costs”.

He said that for marketers to sell comfortably, they must sell between the range of N220 and N240 per litre.

According to him, the the government is finding it difficult to continue subsidising the price of petrol.

He, therefore, advised that total deregulation as the only solution.

He also urged the government to allow the private sector to import petrol as it is being done to aviation fuel, diesel and kerosene.

Osatuyi called on IPMAN members to sell petrol based on what they buy.

He added that landing cost charges and other responsible margins Should be added reasonably.

Collaborating Osatuyi, a marketer, who preferred to be anonymous, confirmed that NNPCL is having challenges of importing refined products due to liquidity constraints.

According to the marketer, members are struggling to get the product, while all marketers both IPMAN, MOMAN and DAPPMAN are struggling to get products from the sole supplier, NNPCL.

“We are also in this situation where Nigeria is not pumping enough crude oil due to oil theft.

“Currently, we are only pumping between 1.1 million to 1.2 million barrels per day against hitherto 1.8 million barrels per day,” the marketer said.

Scarcity of Foreign Exchange

Marketers also said that scarcity of foreign exchange is adding to the challenges of fuel availablity.

A source with the knowledge of fuel marketing in Nigeria said the Direct Purchase and Direct Supply (DPDS) option had crashed.

The source told The NewsZenith Nigeria has reached a stage where the government requested for a credit facility from DSDP on product supply but faced challenged backlog of debts.

“The NNPCL partners, who are getting crude oil and supply refined products could not access bank credit due to existing huge debts,” the source told The NewsZenith.

According to him, high forex also posed a serious challenge to the importation, currently, at N800 to a dollar.

“When big vessels come with products, they are distributed by smallers vessels to ports in Lagos, Warri and Port Harcourt.

“Private depot owners hire smaller vessels and are paying for service in dollars.

“Some of them source dollars in the open market. So, the dollar also determines the price of products.

“You cannot expect them to sell petrol at N184/litre when the price of hiring vessel jumps from $111,000 from $38,000.

“This is depent on the level of the vessel and these charges paid in dollars.

“The cost of hiring smaller vessels to move products to the Private Depot Owners (PDOs) has jumped recently.

This is due to issues hike in diesel cost, foreign exchange and other industry problems.

“Lack of purchasing power in terms of sourcing dollars to evacuate products will continue to bring in ghost scarcity.”



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