The Independent Petroleum Marketers Association of Nigeria has raised concerns over a potential fuel scarcity, despite the rising prices of petroleum products.
The association indicated there might be friction between its members and the management of the Nigerian National Petroleum Company Limited which could lead to disruptions in fuel supply.
The PUNCH reported that while speaking in Ilorin, Kwara State capital on Friday, the IPMAN National Public Relations Officer, Alhaji Okanlawon Olanrewaju, revealed that the prices NNPC was offering marketers were unreasonably high, posing a threat to the fuel distribution network.
He warned that the current pricing strategy could trigger another round of fuel scarcity across the country.
Olanrewaju explained that the NNPCL had proposed selling fuel to IPMAN members at a rate of N1,010 per liter, a price even higher than what NNPC sells at its retail outlets.
He added that the imposed price, along with transportation costs, was making it increasingly difficult for independent marketers to operate efficiently.
“The problem IPMAN is facing in the downstream oil sector is confounding. We realize that what NNPC is imposing on us is too much. NNPCL is the sole off-taker from Dangote oil refinery, and the amount the NNPCL wants to sell to us is too high,” he stated.
“NNPC wants to sell at N1,010 to IPMAN. This price is even higher than what NNPCL sells at their retail outlets, including transportation costs. That’s a very difficult situation they are putting us in. We may not be able to survive in that kind of situation because we’ll have to sell to the same members of the public. It’s like they want to tag us as bad marketers,” Olanrewaju said, calling the situation unacceptable.
Olanrewaju further disclosed that IPMAN members had collectively paid around N15 billion into the NNPCL’s accounts months ago for fuel, but were yet to receive the product.
The funds were paid based on the old price of N750 per liter, but now the NNPCL was demanding that marketers top up their payments to reflect the new rate of N1,010 before they could collect the product.
“This is for about two to three cargoes at the old price of N750 per litre. And now they want to increase the price after about three or four months,” Olanrewaju said, expressing frustration. “They’ve asked us to top up the money paid to them before we pick the product. And that’s what they have been doing always. We cannot continue doing that.”
In response to the situation, IPMAN’s leadership, under the direction of its president, has instructed members to halt payments until a resolution is reached.
A National Executive Council meeting is scheduled for Wednesday to deliberate on the matter.
In the meantime, Olanrewaju indicated that the ongoing standoff could lead to a reduction in fuel availability, warning, “By the time we didn’t pick product for some time and we start exhausting what we have, definitely, there’s going to be scarcity.”
Olanrewaju also touched on the financial difficulties faced by marketers, many of whom rely on bank loans to operate. He pointed out that with rising interest rates, the current situation was becoming unsustainable.
“Economically, what they want us to do doesn’t sound good. Because we sourced the money from banks and we’re paying money on it. We all know the way interest rates are going up in banks. They also go to banks even with better negotiation powers than us individual marketers,” he added.
While acknowledging that the directive for marketers to halt payments could result in fuel scarcity, Olanrewaju opposed any suggestion of returning to a fuel subsidy regime, describing such a move as counterproductive.
He emphasized that while there are challenges in transitioning to full deregulation, it would ultimately benefit the industry.
“Achievements have been made. There may be some hitches along the line, but it’s better we take these steps. It may be tough now. The step the government is taking is good. By the time we’re in full deregulation, it’s going to bring about real competition in the downstream oil sector which is good for the economy,” he noted.
He also called for the removal of the NNPCL’s monopoly over fuel from the Dangote refinery, arguing that opening up the market to other players would lower prices.
“NNPC should not be the sole off-taker of Dangote fuel. If it’s opened up, the price would crash down. We the IPMAN members are not finding it easy because we can’t plan our business,” Olanrewaju concluded.
