The Federal Government announced on Saturday that it had shut down the operations of seven depots in various locations in Nigeria for dispensing Premium Motor Spirit, popularly called gasoline, at outrageous prices to outlets.

It said the action from the affected deposits contravened the provisions of the Petroleum Industry Act 2021 and also contributed to the recent PMS supply crisis in the downstream oil sector.

Revealing this to reporters in Abuja, Nigerian Midstream and Downstream Petroleum Regulatory Authority chief executive Farouk Ahmed explained that the government had made several commitments to all stakeholders in the downstream oil sector.

“Stakeholders include the Nigerian Major Oil Traders Association, the Nigerian Independent Oil Traders Association, the Nigerian Oil Products and Tank Traders Association, etc.,” he said.

However, Ahmed claimed that despite commitments to distributors and the fact that the sector was still a regulated market, the affected depots continued to increase the cost of gasoline much more than what they had been approved to do.

He said the government had confirmed that the price for chartering vessels for the transport of PMS by traders had increased, but stressed that the issue had been discussed with the trader as to how it would be addressed.

“We sat down with marketers to discuss these issues and how to address them. But traders have continued to increase the ex-deposit price beyond reasonable margins,” Ahmed said.

He added: “The increase is outrageous even though NNPC (Nigerian National Petroleum Company Limited) sells them at a very low price. We had meetings with them (marketers) and asked them to meet the approved price, but they have continued to increase the cost.

“So we had to take action and the first thing we did was close some of the marketing warehouses. We closed seven deposits. We closed Ardova and RainOil in Lagos, as well as all their facilities”.