It may be difficult for independent oil marketers to sell premium motor spirit (PMS), otherwise known as petrol, at the official pump price of N87 per litre in the nearest future.
Despite threats of sanctions by the oil and gas industry regulator – Department of Petroleum Resources (DPR), that it will descend heavily on any marketer who violates the law on pricing, the independent marketers said it would be difficult to sell at the official price because they don’t get the product at regulated rate.
The marketers, under the aegis of Independent Petroleum Marketers Association of Nigeria (IPMAN), said they buy PMS from private depot, whose ex-depot prices are far above N87 per litre, especially since the current fuel scarcity began in May.
According to them, the Nigerian National Petroleum Corporation (NNPC), which is the sole importer of fuel in the country, does not supply products to them. NNPC has been the sole importer of fuel since the major marketers stopped importation.
The major marketers stopped importing fuel due to unpaid subsidy of over N300 billion and the uncertainty surrounding government’s continuity of Petroleum Support Fund (PSF) from which subsidies on imported fuel are paid.
Unfortunately for IPMAN, NNPC prefers to supply major marketers with fuel to sell at their retail outlets to enable easy access to the product by motorists.
According to an industry source, NNPC’s preference of use of major oil marketers’ facilities is because of their compliance to the rules. The major marketers, the source said, are not violators of the rules as they sell at official price and their pumps are properly calibrated. But independent marketers engage in sharp practices, selling with under-dispensing pumps, among others.
IPMAN Zonal Vice Chairman, Western Zone, Kunle Bamigboye, at a meeting with DPR, depot owners (Major Oil Marketers Association of Nigeria and Petroleum Products Marketers Association in Lagos, said their members do not get supplies from NNPC, but still keep their stations running, buying from private depot owners whose prices are higher than the government’s N87 per litre price.
He said: “We are the orphans of the industry. None of our members gets two trucks of PMS in a month because of lack of fuel. We buy PMS at below the regulated price only from the depots of the NNPC, but the supply doesn’t come. When we buy from the depots of DAPPMA members, the price is always above the pump price and as businessmen we wouldn’t sell below the cost price. We have to sell above the regulated price to make profit,” he said. He, however, said IPMAN members sell fuel with properly calibrated pumps.
A IPMAN former Zonal Chairman, Western Zone, Mr. Olumide Ogunmade, corroborated Bamigboye and noted that if the NNPC supplies them fuel they will stop buying from private depots and none of their members will sell above N87 per litre.
DPR’s Head, Downstream, Alphonsus Mudei, who represented the Director, Mr. Mordecai Danteni Baba Ladan, at the meeting warned the marketers and depot owners that the Department would no longer tolerate deliberate flouting of the law by marketers hoarding petrol and selling it above the official pump price of N87 per litre because it was brought in under the PSF.
He said: “In the last few months, the nation has experienced epileptic supply of PMS, which has reflected in the sale of this product above official pump price. We have evidence to buttress this. We find this trend unacceptable given that marketers with whom we have constantly interacted with have benefitted from the Petroleum Support Fund, which has enabled marketers to operate their businesses at a level that should guarantee constant and uninterrupted supply of products.”
