Business

Marketers Urge Tinubu to Address Ongoing Petrol Scarcity Issues

Published by Tope Fakinlede on August 4th, 2024.

Marketers Urge Tinubu to Address Ongoing Petrol Scarcity Issues

To address the persistent petrol shortages across Nigeria, a group of downstream sector operators has called on President Bola Tinubu to investigate the operations of the Nigerian National Petroleum Company Limited (NNPCL), the Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN), and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

Independent marketers have criticized what they term as “dubious practices” involving NNPCL, tank farm owners, and NMDPRA, which they believe hinder the steady supply and distribution of petrol to retail outlets. These marketers, who wished to remain anonymous, argue that NNPCL’s role as the sole importer of Premium Motor Spirit (PMS) has left members of the Independent Petroleum Marketers Association of Nigeria (IPMAN) dependent on DAPPMAN for their product supply. Despite IPMAN controlling over 70% of petrol stations nationwide, DAPPMAN, the tank farm owners, are the primary suppliers.

Reports indicate that while NNPCL sells petrol at an ex-depot price of N556.5 per liter, private depot owners charge marketers between N700 to N740 per liter. Consequently, retail prices across the country range from N800 to N900 per liter. According to IPMAN National President Abubakar Maigandi, this pricing leaves little room for profit at the retail level, forcing marketers to sell at higher prices to maintain any profit margin.

Industry stakeholders are advocating for a return to the previous system, where NNPCL allocated petroleum products to tank farm owners for distribution to marketers with a regulated pricing structure. They are urging the federal government to reform the distribution chain by enforcing a standard ex-depot price for tank farm owners.

Previously, NNPCL’s allocation system helped regulate pricing, but now independent marketers are at the mercy of tank farm owners, who set prices without oversight. The lack of a regulated ex-depot price has led to increased costs for marketers, who are then blamed by the public for high retail prices.

The marketers also criticized the NMDPRA for failing to address the practices of tank farm owners and instead using marketers as scapegoats. They claim a powerful cabal within the sector is undermining President Tinubu’s efforts, benefiting from high profits while causing hardship for ordinary Nigerians.

In addition, the marketers hope that supporting the Dangote Refinery and revitalizing Nigeria’s four refineries will help alleviate the petrol shortage and reduce the need for imports.