Supply problems associated with the distribution of Premium Motor Spirit, popularly called gasoline, may persist until June this year, oil traders said on Wednesday.
Nigeria’s downstream oil sector has been dealing with relentless gasoline shortages since last year.
The sole importer of the product, the Nigerian National Petroleum Company Limited, has repeatedly complained about the enormous burden of taking on the country’s fuel subsidy.
On Monday, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said that NNPC was selling gasoline at a loss due to its mandate from the Federal Government regarding the fuel subsidy.
“If you are a businessman, look at it from this perspective, that you are now in the business where you are forced to sell to the public at a loss. That is not an easy job, I must tell you,” said the minister.
Last week, Minister of Finance, Budget and National Planning Zainab Ahmed said that the Federal Government had budgeted around N3.6 trillion for fuel subsidies until June 2023.
Reacting to the development, oil traders said on Wednesday that the fuel supply crisis in many parts of the country that often leads to fuel shortages could persist until June, under the government’s plan to end the subsidy for gasoline in that month.
The National Public Relations Officer of the Nigerian Independent Oil Marketers Association, Chief Ukadike Chinedu, told our correspondent that fuel imports and subsidies were making Nigerians suffer.
He said: “This issue of subsidies and the importation of petroleum products are the main reasons why we suffer in this way and have an epileptic supply of PMS. This may continue until the current administration leaves in May or until June of this year.
“The exchange rate is affecting fuel imports, so the costs of petroleum derivatives are also high. We use too much naira to chase the few dollars that are available. So the solution for us is to refine our crude here and make our deposits work.”
He added: “In addition, we must take into account that most of the time, when an administration leaves, there is usually a shortage of products. It happened during the time of former President Goodluck Jonathan.
“This is because the suppliers will be too tired of selling petroleum products for their debts not to be passed on to the next administration. Successive governments have suffered from this epileptic distribution of petroleum products during the transition to a new government.
“The government is being liquidated, and if you are a supplier you have to be careful regarding the supply of petroleum derivatives. Remember that when Jonathan was there, the merchants who were supplying products stopped and went on strike, demanding that they be paid the arrears”.
The president of the Nigerian Petroleum Retail Outlet Owners Association, Billy Gillis-Harry, also stated that the availability of gasoline for vendors to distribute remained an issue of concern.
“Let there be products to sell. That is what we are longing for. Once that issue is resolved, others will be addressed as well,” he stated.
Commenting on the matter, a former president of the Nigerian Association of National Accountants, Dr. Sam Nzekwe, told our correspondent that the crisis in the downstream oil sector would be better addressed when Nigeria’s refineries become functional.
The president of the IPMAN Satellite depot, Akin Akinrinade, told The PUNCH that its members had not yet received any products from the state oil company.
He said: “We have yet to see anything. They promised us something in December, but now they said January. All they have done is ask us to submit names and switch from the old system: NNPC Express to NNPC Retail. Other than that, we have not received any products yet.
“But I can assure you that this shortage will continue long after June if NNPCL does not supply us with products directly and at a regulated price.”
Akinrinade also said that the price of fuel had reached between N222/N225 in private depots as of last Friday.
The national controller for operations, IPMAN, Mike Osatuyi, also told The PUNCH that its members had yet to receive any products from the NNPCL.
“We are still waiting. We will wait until the middle of this month before reacting. But since last week, our members are buying fuel above N200 per liter. But the information coming to me is that as of today, the price has increased to N230 per liter, without transportation and other expenses,” he said.
In December, Osatuyi had told The PUNCH that his members were holding strategic meetings with NNPCL’s new retail CEO, Hubb Stockman, who promised to supply them directly at the government-regulated price of N148/litre starting this month.
However, the association members, according to Osatuyi and Akinrinnade, had yet to receive any products despite compiling the necessary lists and switching from the old NNPCL Express platform to NNPCL Retail as per Stockman’s instructions.
PUNCH contacted the Executive Secretary of the Nigerian Major Oil Traders Association, Clement Isong, about why some of its members had no products.
It had not yet responded at the time of filing this report.
However, a senior MOMAN member who requested anonymity told The PUNCH that although the shortage had subsided, some of their stations are currently out of supplies.
“The shortage has eased and things are back to normal. Without queues and our stations sell at normal regulated prices. However, some of our stations that do not have supplies will be supplied,” he had told The PUNCH last Thursday.
Nigerian Petroleum Products and Tanks Traders Association spokesman Adewole Olufemi said the tanks needed more fuel supplies from the NNPCL.
“Until and unless the tails are fully phased out, we will need more volume than usual, DAPPMAN cannot be satisfied. We are working with the sole provider, NNPC Ltd, and the regulator to ensure that PMS is available across the country,” he said of the shortage.
On the skyrocketing ex-deposit prices, Adewole said that like the NNPCL, depot owners were also on a full cost recovery regime.
“Costs incurred by traders, vessel chartering, trucking and approved margins will be recovered just as NNPC Ltd does to recover its cost inputs,” it added.
NNPCL spokesman Garba Deen could not be reached on his official line for comment.