NNPC, IPMAN disagree on Why Fuel Scarcity Lingers in Nigeria

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The Nigerian National Petroleum Corporation and Independent Petroleum Marketers Association of Nigeria give different reasons for the lingering fuel scarcity in the country

By Anayo Ezugwu THE Independent Petroleum Marketers Association of Nigeria,  IPMAN, and the Nigerian National Petroleum Corporation are canvassing different reasons to explain the lingering fuel crisis in the country. The IPMAN attributed the fuel scarcity to the inability of the Nigerian National Petroleum Corporation, NNPC, to  supply the quantity of petrol needed to meet national demands while the NNPC is blaming oil marketers for abandoning importation of petrol due to losses they incurred. IPMAN, in a statement signed by Debo Ahmed, western zonal chairman of the association, said none of the NNPC/PPMC depots within the western zone has adequate petrol in stock to meet demand from the public. He is urging the federal government to implement full deregulation of the downstream sector as a way out of the crisis. According to Ahmed, “The management of NNPC should increase petrol allocations to IPMAN marketers rather than allocating excess products to NNPC retailers who have less than 25-outlet within Lagos. IPMAN that has over 2,500 members and over 500 outlets across the South-west was given 30 per cent against 60 per cent agreed by NNPC and marketers,” he said. According to Ahmed, most of IPMAN members had to close their filling stations due to the inability of NNPC/PPMC to distribute products to depots for marketers to load adequately. He alleged that the corporation was using lopsided distribution formula for the allocation of limited available products. “IPMAN was given 30 percent, MOMAN 30 and NNPC retails 50 as against 60 percent for IPMAN and 20 for MOMAN; NNPC retails 20 in all the functioning depots in the country. The imported petrol by NNPC/PPMC is distributed through the Private Fund Initiative, PFI, system to private depot owners (DAPPMA) to sell to independent marketers at a controlled price of N133.28k. But DAPPMA members are selling between N160 and N162 above the regulated price, of which no marketer can buy at that price and sell at the regulated price of N145 per litre,” he said. He urged the government to intervene and check the activities of DAPPMA as they sell above the recommended pump price. He also urged the Department of Petroleum Resources, DPR, to sanction defaulting depot owners who sell petrol above the approved pump price. “DPR only sanctions independent marketers by closing their stations. You can only sell what you buy; we are business people, for how long do we close down our stations since we have financial obligations to the banks? Probably, the federal government may have deregulated without the public being aware. “During, the recent Senate committee meeting held with stakeholders in the oil industry, one of the suggestions from the Minster of State for Petroleum, Dr Ibe Kachikwu, was the introduction of dual price regime. This is a regime whereby NNPC retail will be selling at N145.00 while other marketers will be selling at their own price,” Ahmed said. However, Isiaka Razak, chief financial officer, NNPC, who appeared before Senate Committee on Public Accounts investigating the fuel supply situation in the country, expressed worry that the task of importing fuel into the country was left alone to NNPC. He said for one year, marketers avoided importing fuel because they incurred losses. “The private sector cannot bring in the product because it does not make economic sense for them. They cannot land it at a price for which they are going to sell and make profit; that is the main reason they are not bringing in the product. “As a national oil company, the NNPC is the supplier of last resort and we must take that responsibility where the private sector, which is profit-driven, runs away from a particular business. The economics is that if you bring in the product into Nigeria, you will make a loss; if there was profit in this business, the private sector would have been the ones bringing in this product. “NNPC was designed to bring in the product 100 per cent; the private sector has stepped out but we have a national responsibility that Nigeria does not suffer and that is the role the corporation is playing by bringing in the product,” he said. According to Razak, NNPC was absorbing the operational loss in the course of importing petrol. “There is a loss element to it which the private sector is running away from but the NNPC is absorbing it and that is the basic summary of where we are.” – Feb.  24, 2018 @ 4:00 GMT |

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