Confusion As FG Denies Petrol Price Hike, Marketers Seek Deregulation

The Federal Government has denied any increase in the pump price of Premium Motor Spirit, popularly known as petrol, despite the hike in the cost of the commodity across the country.

The Minister of State for Petroleum Resources, Chief Timipre Sylva, in a statement issued by his media aide, Horatius Egua, in Abuja on Friday, said the President, Major General Muhammadu Buhari (retd.), had not approved any price increase for petrol.

The statement read in part, “President Muhammadu Buhari has not approved any increase in the price of PMS or any other petroleum product for that matter.

“There is no reason for President Muhammadu Buhari to renege on his earlier promise not to approve any increase in the price of PMS at this time.

“Mr President is sensitive to the plights of the ordinary Nigerian and has said repeatedly that he understands the challenges of the ordinary Nigerian and would not want to cause untold hardship for the electorate.”

The minister added, “The government will not approve any increase (in the price) of PMS secretly without due consultation with the relevant stakeholders. The President has not directed the Nigerian Midstream and Downstream Petroleum Regulatory Authority or any agency for that matter to increase the price of fuel.

“This is not the time for any increase in the pump price of PMS.”

He said what was playing out was the handiwork of mischief makers and those planning to discredit the achievements of the President in the oil and gas sector.

“I appeal to Nigerians to remain calm and law-abiding as the government is working hard to bring normalcy to fuel supply and distribution in the country,” Sylva added.

The minister’s position has, however, caused confusion as oil marketers had earlier confirmed the increase in petrol price by N10, stating that this was one of the reasons why major marketers were currently dispensing the commodity at higher rates.

Several calls to the spokesman of the NNPCL, Garba Deen Muhammad, to speak on the hike in PMS price were not answered, but the Major Oil Marketers Association of Nigeria attributed the increase in the cost to logistics.

In a statement on Friday night, MOMAN sympathised with Nigerians over the challenges being faced in the purchase of petrol at filling stations across the country.

It said, “These queues are caused by exceptional high demand and bottlenecks in the distribution chain. The major cause is the shortage and high (US dollar) costs of daughter vessels for ferrying product from mother vessels to depots along the coast.

“Next is inadequate number of trucks to meet the demand to deliver products from depots to filling stations nationwide. These high logistics and exchange rate costs continue to put pressure on prices at the pumps.

“Over the past three months, staff (members) and management of MOMAN companies have worked diligently at depots and filling stations to relieve the stress faced by customers through the Christmas and New Year period.

“Our members have again agreed to extend depot loading hours as well as keep strategically situated service stations open for long hours to ease access to fuel for our customers.”

MOMAN said it would continue to use its best endeavours to ensure that the product was sold at pump prices currently approved by the regulatory authorities despite pressure on the price by demand and costs in the immediate operating environment.

“A final resolution to these challenges will be the full deregulation of the petroleum downstream sector to encourage the liberalisation of supply and long-term investment distribution assets. We urge the government to work towards this end goal,” the body stated.

Meanwhile, marketers said on Friday that the Federal Government might have commenced the gradual removal of subsidy on petrol even as the severe scarcity of the product continued across the country.

It was gathered that the government, based on the advice of major oil marketers, had to raise the pump price of petrol from N165/litre a few months ago to N175/litre, and on Thursday, it again increased it to N185/litre as part of moves to phase out fuel subsidy.

Although these were the approved rates by the government, marketers hardly dispensed the commodity at the above stated prices due to challenges in accessing the product.

A key major marketer told our correspondent that most depots had run out of products since the past three weeks, while a few others only received epileptic supply during this period.

It was also gathered that the depot that stores emergency fuel for the Federal Capital Territory was currently empty, as marketers now resort to Lagos for petrol to supply Abuja and the northern region.

“Many depots have been out of products for about three weeks now, while the supply to the few others has been epileptic during this period. When you get supply, it will be so insignificant that there will always be a rush,” a major marketer, who spoke to our correspondent in confidence, stated.

“This means that the NNPC Limited is not importing enough and this has been going on for a long time. They are not meeting up with the expected demand.”

Asked if the NNPCL was reducing imports in a bid to tackle smuggling, or if it was due to the burden of subsidy, the marketer replied, “It is not that they are afraid of smuggling. They have not even come out to say products are going out of the country through smuggling.

“The issue has been that the level of supply has gone down, and then the major marketers, whom they rely so much on, have advised them to do a gradual increase in the pump price, which they have been doing.

“You know that they raised the price a few months ago from N165/litre to N175/litre and just yesterday (Thursday), it was increased from N175/litre to N185/litre, and this may continue for some time, which is a gradual way of phasing out subsidy.”

The marketer also pointed out that there had been concerns around logistics, stressing that dealers in Apapa, Lagos, were being forced to pay N100,000 on each tanker to naval men manning checkpoints before being allowed to cross under the bridge at the Navy Dockyard Road to load petroleum products from the depots.

The source added, “Marketers are forced to pay this amount, whether they want to pick from Conoil, Aiteo, MRS, Oando, or whichever. There was a time the downstream regulator came to complain about this to the head of the security agency involved, but he defended his boys and nothing was done to stop it

“This is an illegal fee and it all adds up to the unit cost of the pump price of petrol. And even when you have your N100,000, it is not that easy to pass through this bridge that I just told you about.

“This is one of the hiccups affecting supply. Some marketers spend almost a week crossing that bridge even when they are ready to pay N100,000. Right now, the price has been officially raised to N185/litre, but even here in Lagos, you have major marketers selling at N199 and others selling above N200/litre.”

Also speaking on concerns in the downstream oil sector, the Secretary, Independent Petroleum Marketers Association of Nigeria, Abuja-Suleja, Mohammed Shuaibu, confirmed that most depots were dry.

He stated that in the past, the NNPC used to pump from its jetty to depots, but noted that the pipelines had been destroyed, adding that supply from the national oil company had dropped.

Asked to state the number of depots in Lagos where the NNPC could drop products, he said, “Before, they pumped from their jetty to Mosimi; but right now, the pipeline through which the product is being pumped has been vandalised.

“They used to pump to Ejigbo in Lagos, where the marketers can go freely and take products. Also, private depots usually bring their vessels to take products and drop them in their various tank farms; for instance, Conoil will load for its own, Unipetrol loads its own, Total loads it own too, and the flow was okay at that time.

“Independent marketers and some major marketers too, they pick from Ejigbo, Mosimi, Ore, etc. But as it is now, all those places are dried up, because most of the pipes have been vandalised, not to talk of the eight depots in the North, which are not working.”

Shuaibu added, “Right now, there is a bigger problem in the North in terms of product availability. Supposing the Suleja depot has products, it can solve the problem overnight in Abuja and environs. But the Suleja tank is empty, whereas it is supposed to be a reserve that will solve the problem of Abuja and environs.

“In every nation, there is always a reserve in case of emergencies. The Suleja depot was basically designed to solve the supply problems of Abuja in case of any emergency, but as it is now, it doesn’t have anything in its tank.”

The IPMAN official said what was currently being done was to resort to Lagos, Warri and Port Harcourt.

He said the government should come out and explain to Nigerians what the problem really was.

The NNPC and the Nigerian Midstream and Downstream Petroleum Regulatory Authority have both remained mute on the concerns raised by the marketers amidst the scarcity of petrol nationwide.

Speaking during a live television programme monitored in Abuja, the Deputy National President, IPMAN, Zahra Mustapha, declared that there was confusion in the downstream oil sector.

He said, “We are in a very complex situation because the burden of subsidy that the government is carrying is no more sustainable and the volume that the NNPC is supplying for now, being the sole importer of the petroleum product, has been hit hard.

And because of that, the supply that we receive as the marketers at the loading point is being reduced by over 50 per cent. It doesn’t seem that they are bringing in more; if they are, we will be getting the volume we usually get before.

“Since July/August last year, the volume we receive is not up to 50 per cent of what we usually get. What is trending in the private depots is that the volume we are getting is not enough. With the look of things in the private depots, I assume it is not enough, because if they have it they won’t hoard it.”

NLC condemns hike
Meanwhile, the Nigerian Labour Congress has decried the reported increment in the fuel pump price across the country.

The Secretary General of the NLC, Emmanuel Ugboaja, who spoke in an exclusive interview with one of our correspondents in Abuja, also reiterated the need for the country to have functional refineries.

Ugboaja said, “Speaking now will be like whipping a dead horse. It’s an embarrassment for a government that is on its way out to increase fuel price. Nigeria is an oil producing country. However, we don’t have functional refineries. We send our crude oil overseas and it is sent back to us once it is refined and we sell it to the citizens. This should not be so.

“The solution now is for us to get functional refineri

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