A new round of arm-twisting has started, and Nigerians may soon be forced to pay between N178 and N200 per litre for gasoline, three months after regulators quietly approved an increase in fuel prices in response to marketers’ claims that they could no longer maintain operations and sell at the regulated price of N165 per litre.
While the Federal Capital Territory (FCT) and the North-Central area had fuel lines due to poor road access brought on by flooding, Lagos State has experienced lines since Monday due to an alleged increase in ex-depot prices, debt, and logistical issues.
If the decisions made three months ago in response to a similar problem are any indication, Nigerians should be prepared for another increase in the price of petrol if they want to ensure a consistent supply.
Many filling stations in Lagos are already empty despite having goods for sale. Many independent marketers are taking advantage of the circumstance to sell above the listed price while large marketers continue to maintain the N170 per litre price.
The depot price has increased from N148.7 per liter to N178, according to Dele Tajudeen, Chairman of the Independent Petroleum Marketers Association of Nigeria’s (IPMAN) Western zone. The Nigerian National Petroleum Company Limited (NNPCL), according to several stakeholders, is preventing some marketers and government-owned depots from loading while diverting supplies to select private depots.
The state oil corporation is deeply indebted to some operators, according to the stakeholders, who also told The Guardian that the situation is getting worse because of logistical issues.
Tajudeen claimed that none of the NNPC depots had any products and that the private depots had inflated prices as a result.
“The only choice available to our members to maintain business flow is to choose private depots. Due to how the hike will impact both the general public and our profit margins, we are vehemently opposed to it. Some privately owned depots with products purposefully refuse to sell for reasons they alone know,” he stated.
The head of IPMAN stated that the increase in pump prices should not be attributed to marketers and added that “selling at N170 per litre is not realistic.”
We will thus sell between N200 and N210 per litre in Kwara, Ondo, Osun, and Ekiti states while our members would be forced to sell between N195 and N200 per litre in Lagos, Ogun, and Oyo states. The majority of tank farm operators have cited various costs, including vessel fees paid in dollars, as justification for the hike.
We are also requesting that the NNPC management and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) look into the private depot owners’ arbitrary fuel price rise.
Mohammed Shauibu, the Suleja-Abuja branch secretary of IPMAN, expressed confidence that the lines will shorten as soon as the government, depot owners, NMDPRA, and NNPC reached an agreement.
Additionally, the NMDPRA has informed us that the wait times would cease quickly. Farouk Ahmed, the Authority Chief Executive (ACE), who made this statement, clarified that all the stakeholders are gathering to find a long-term solution to every problem that has been brought up.
There is absolutely no truth to the stock-out rumor, the Authority chief declared. Even though there might be some problems, the absence of PMS is surely not one of them. There is sufficient to endure for longer than 20 days. We both agreed that the loading of PMS should begin right away, and I can attest that it has.
The lines will dissipate in a few days.
The NMDPRA further stated that actions are being done to address the ongoing lines that began in Abuja two weeks ago. According to Ogbugo Ukoha, Executive Director of Distribution Systems, Storage and Retailing Infrastructure at NMDPRA, while the flood in Lokoja is to blame for the lines, NNPC is currently bringing vessels into the Calabar region.
The NNPC had attributed the lack of products in FCT and other areas of the Northern region to floods in the Lokoja area, however The Guardian’s visit to Lokoja to assess the situation revealed that the route has since been cleaned. Yesterday, spokeswoman Garba Deen Muhammad did not immediately return calls due to the situation, which has spread to other parts of the nation.
According to the Major Oil Marketers Association of Nigeria, the organization sells products. Clement Isong, the association’s executive secretary, predicted that the lines would be cleared in roughly 48 hours when the association’s trucks left the area.
The PMS transportation in some areas of the country is still being impacted by flooding, according to the Nigerian Association of Road Transport Owners (NARTO). The situation was made worse, according to Yusuf Lawal Othman, national president of NARTO, by the condition of the roads in the Auchi-Okpella area, which had been blocked by local residents for more than two weeks.
However, there are signs that Nigeria’s situation might get worse in the long run because a proposed export embargo on American refined products is expected to cause major difficulties and high costs for international refining networks.
A Wood Mackenzie study sent to The Guardian in an email revealed that a planned ban on US oil products could cost US consumers $5 billion less in gasoline, cost European trading partners $2 billion more in distillate costs, and erase $30 billion in profits from US refiners.
“Our calculations show that the possible ban might save U.S. consumers on gasoline, but any potential savings would be reliant on new global trade routes being built efficiently, which is not a guarantee,” said Alan Gelder, VP of Refining, Chemicals & Oil at Wood Mackenzie.
If this process is disrupted, prices could increase, reducing consumer savings in the US. The future U.S. supply may be threatened if U.S. refineries receive fewer investments in the long run.
A U.S. refined product export restriction, according to Wood Mackenzie, would largely affect Gulf Coast refiners and result in a 1.4 million barrels per day (b/d) global shortage of distillate gasoline and a 1.5 million b/d reduction in U.S. crude runs. It would take record export volumes from China, Russia, and the Middle East to close this supply imbalance.
“There is enough global capacity to cover U.S. exports to Europe and Latin America,” said Raul Calzada, Research Analyst for North America Refining Assets. “However, it would require extraordinary circumstances, record exports, and elevated refinery utilisation levels from China, Russia, and the Middle East.”
