Victor EzejaWith the return of fuel scarcity in different cities and looming hike in the price of the product, petroleum marketers have said they are not benefiting from the subsidy programme of the Federal Government meant to reduce the cost for ordinary Nigerian users.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) leadership in Lagos on Monday said its members should fill free to begin dispensing petrol at N180 per litre revealing that they are currently getting the product at a higher cost, making it impossible to sell at the government control price of N165.
Some of the marketers as confirmed by the chairman of IPMAN, Lagos Satelite Depot, Ejigbo Mr. Akin Akinrinade, had shut down operations which caused the scarcity at outlets because they no longer want to operate at loss and under hostile conditions.
READ ALSO: You’re Free To Sell Fuel Above N180, IPMAN Tells Marketers
While appearing as a guest on Channels Television Sunrise Daily on Tuesday morning, Billy Gillis-Harry, the National President Petroleum Products Retail Outlet Owners Association of Nigeria (PEPPTOAN) said the cost of running retail outlets in Nigeria has become highly unbearable and the supply is not efficient despite the subsidy regime. He said they are equally suffering from shortage of supply from depots.
In April, the National Assembly approved the sum of N4 trillion for payment of petrol subsidy in 2022. President Muhammadu Buhari had while sending the request to the federal lawmakers, cited changes in inflation and the rising oil prices.
The government had planned to remove subsidy on fuel which 100 per cent imported and fully deregulate the downstream petroleum sector by the second half of this year, but in January it deferred the plan by 18 months following concerns raised by different groups that the timing was wrong and could have much negative impact on the citizens.
Gillis-Harry, however, observed that impact of the subsidy is not being felt by retail outlet owners as the cost of loading and other operating costs have made it impossible for them to sell at a government-controlled price.
“As a retail outlet owner, I am not getting any bills settled by subsidy. If retail outlet owners are getting values for the subsidy, it should impact very positively on our operating costs and we should not be talking about the cost of running our generators with diesel, and other logistics costs that are skyrocketing every day.”
He suggested that full deregulation of the downstream petroleum sector is the ultimate answer to the petroleum supply challenges encountered in Nigeria almost on daily basis.
“Subsidy should apply somewhere else not in petroleum because, actually, we need to ask everybody what is the impact of subsidy in the petroleum product consumption. The trillions of naira is just focused on PMS (Premium Motor Spirit) and today, we are still talking about queues for PMS so what’s wrong? We need to know,” he stated.
On his part, the national president of IPMAN, Chinedu Okoronkwo said the Nigerian National Petroleum Company (NNPC) solely imports petroleum products and hand over to private tank farm owners who supply to them at additional charges. He added that under the normal government price template, marketers are supposed to get the product at N148.17, but currently they are getting it at N160 coupled with transportation and other costs.
The IPMAN national president said such a situation has made the business unfavourable for them, leading many to be out of the business.
Okoronkwo called on the regulatory authorities to meet private depot owners and resolve issues so that there would be sustainable pricing instead of forcing marketers to sell at N165 when it is not feasible for them to do so.
In response to the persistent scarcity of fuel witnessed in some cities recently said to be linked to transportation cost, President Buhari had approved an additional N10 for transporters of PMS across the country.
This Okoronkwo said, that could go a long way in cushioning the effect of operating cost, but if the cost of getting the product is not addressed at the depot point, the problem would still persist.
He also said they have suggested that each of the five zones within the NNPC distribution system should have one depot where they load to reduce the case of private depot operations which according to him, “milk marketers.”
He said the problem would stop if marketers start receiving petroleum products directly from NNPC designated depots, adding that refining the product locally would cut off a lot of costs around transportation.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
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