The Nation Newspaper

Tag: marketers

  • Marketers hail deregulation of downstream sector

    The deregulation of the downstream oil subsector  is paying off as marketers are buying fuel from multiple outlets at prices.

    Independent Petroleum Marketers Association of Nigeria (IPMAN) National President, Chief Chinedu Okoronkwo said  his members have been buying fuel with ease from the Nigerian National Petroleum Corporation (NNPC) and private depot owners since the sector’s deregulation last May.

    He said due to deregulation, marketers were free to source for fuel at outlets or channels that benefit them.

    According to them, IPMAN members get premium motor spirit (PMS) from the Nigerian National Petroleum Corporation (NNPC) at N132.8 excluding the cost of transportation,  while those that are not satisfied with the NNPC price approach other importers and negotiate for a lesser price.

    Okoronkwo said: “The Federal Government through the NNPC was selling 30,000 litres of petrol to independent marketers at approximately N2.295million before it increased the price of fuel. Now the government sells 30,000 litres of petrol to marketers at approximately N3.99million. The differential is about N1.7million. Also, the government sells the product to us at N132. 28.

    “When marketers add the cost of transportation to it, about N10 per litre, depending on the distance, they sell at N145 per litre. Some marketers even sell at either N142 per litre or N143 per litre, and they make profit. That is the beauty of deregulation and by implication market forces.”

    According to him, the market is governed by the forces of demand and supply, and in the process, provides a flexible price regime for fuel marketers. The market, Okoronkwo noted, is structured in such a way that marketers can enter the market and exit the market anytime they like.

    He said contrary to reports, there was never a time the  Federal Government banned independent marketers from accessing depots for fuel, noting  that  the issue between the government and the his members has been resolved.

    “The issue of differentials is a normal thing in the industry. Whenever there is an official increase in the pump price of fuel, marketers would compare the old price and the new price and see the one that favours them. That was what happened when the price was increased to N145 per litre and that issue has been resolved as marketers have adjusted to the new price,” he added.

  • Marketers hail deregulation

    Marketers hail deregulation

    The deregulation of the downstream oil subsector  is paying off as marketers are buying fuel from multiple outlets at prices.

    Independent Petroleum Marketers Association of Nigeria (IPMAN) National President, Chief Chinedu Okoronkwo said  his members have been buying fuel with ease from the Nigerian National Petroleum Corporation (NNPC) and private depot owners since the sector’s deregulation last May.

    He said due to deregulation, marketers were free to source for fuel at outlets or channels that benefit them.

    According to them, IPMAN members get premium motor spirit (PMS) from the Nigerian National Petroleum Corporation (NNPC) at N132.8 excluding the cost of transportation,  while those that are not satisfied with the NNPC price approach other importers and negotiate for a lesser price.

    Okoronkwo said: “The Federal Government through the NNPC was selling 30,000 litres of petrol to independent marketers at approximately N2.295million before it increased the price of fuel. Now the government sells 30,000 litres of petrol to marketers at approximately N3.99million. The differential is about N1.7million. Also, the government sells the product to us at N132. 28.

    “When marketers add the cost of transportation to it, about N10 per litre, depending on the distance, they sell at N145 per litre. Some marketers even sell at either N142 per litre or N143 per litre, and they make profit. That is the beauty of deregulation and by implication market forces.”

    According to him, the market is governed by the forces of demand and supply, and in the process, provides a flexible price regime for fuel marketers. The market, Okoronkwo noted, is structured in such a way that marketers can enter the market and exit the market anytime they like.

    He said contrary to reports, there was never a time the  Federal Government banned independent marketers from accessing depots for fuel, noting  that  the issue between the government and the his members has been resolved.

    “The issue of differentials is a normal thing in the industry. Whenever there is an official increase in the pump price of fuel, marketers would compare the old price and the new price and see the one that favours them. That was what happened when the price was increased to N145 per litre and that issue has been resolved as marketers have adjusted to the new price,” he added.

  • Independent marketers to access products

    The Federal Government has restored the rights of Independent Petroleum Marketers Association of Nigeria (IPMAN) to access products in all depots across the country, its chairman, Board of Trustees, Alhaji Abdulkadir Aminu said, has said..

    The action followed the resolution of the crisis that rocked the association which saw the association playing host to members of the Nigerian Association of Transport Owners (NARTO) in Abuja.

    He said: “I am sure that by the minister’s intervention in restoring all our rights across all the depots across the federation, Nigerians will have better access to products because we control 80 per cent.

    “We paid a courtesy call on the minister being a man who initiated this peace to ensure that IPMAN becomes one. He assured us that now that we have heeded to his advice, he hereby restores all our rights to all the depots in the federation.

    “With that now, we can take charge in all the petroleum products distribution in all the 21 depots in Nigeria. In no time the crisis of petroleum products scarcity will no longer exist.”

    He said the marketers’ National Executive is partnering with some multi-nationals to assist the Federal Government to make products available in the country.

    The BoT chairman added that the executive of the association will create value in the industry by ensuring they partner with foreign investors to build at least one refinery during the present administration.

    He however noted that due to the bad roads in the country, IPMAN’s trucks do not last long.

    Speaking, IPMAN’s National President, Chief Lawson Obasi, said the association plans to commence importation of petroleum products to boost the activities of the downstream sector.

  • NRC and oil marketers

    •It is in the interest of both to work together

    Like many public establishments, the Nigerian Railway Corporation (NRC) that used to be a place of pride to work a few decades ago went comatose due to neglect by the Federal Government which has a monopoly of rail transportation in the country, and corruption. However, with the rekindled interest of the Muhammadu Buhari administration in reviving the rail system, one would naturally expect oil marketers to grab the opportunity because of the burden that would be taken off them in transporting their products. They have been moving their products over long distances by road due to the poor state of rail infrastructure.

    However, the disclosure by the acting managing director of the corporation, Engr. Fidet Okhira, that the oil marketers have expressed worries over the integrity of NRC’s rail tracks and tankers, as well as what happens to the road trucks that they procured when rail transportation was unreliable, is troubling. Nonetheless, they are legitimate fears.

    Mercifully, the corporation said it has taken care of its own end by importing about 40 tank wagons even as it has worked on the integrity of its tracks and tankers. The other challenge concerning the fate of the trucks is also not insurmountable. A way must be found round it because transportation of products, fuel inclusive, especially over long distances is better done by rail. That is the way to go.

    Indeed, that would be the essence of government’s plan to link all sea ports in the country by rail. The Lagos-Calabar route, for instance, is targeting all sea ports. This means all imported products would be transported by rail. This will in turn free the roads, thus making them last longer, reduce accidents as well as the cost of doing business, among other advantages. Of course it would also lead to job creation since people must be employed to run the rail services.

    We will better appreciate the prospects of movement of fuel by rail when we consider that NRC can move 20 tank wagons at once, each with about 44,000 litres of fuel. This translates to about 880,000 litres which, according to Okhira, would go a long way in meeting the fuel needs of a city like Kano in a day. The maximum a tanker can carry is about 33,000 litres of fuel. With 880,000 litres per trip by rail, that is about 27,000 tankers off the roads.

    This appears tantalising. But, still, what happens to the road trucks that the marketers purchased to move their products when rail services were unreliable? These, as Okhira explained, won’t be useless. Rather, they could be used to move the products from, say Kaduna to Sokoto where rail cannot reach, after it would have been transported by rail from Lagos to Kaduna. We see some sense in this arrangement because, as we said earlier, it would take a lot of pressure off the roads.

    There are prospects in the collaboration between the NRC and oil marketers. The details can be worked out or fine-tuned. Indeed, it is not only oil marketers that should be encouraged to move their products by rail. Every organisation that is connected with importation of goods should be interested in partnering with the NRC to move their products.

    Since privatisation appears to be the way forward even for the rail sector, we urge that the ongoing process at the National Assembly to privatise the sector be accelerated. The statute that makes rail transportation a Federal Government prerogative has outlived its usefulness; it should therefore give way to allow private investors interested in the sector.

    It is good that the railway corporation has decided to employ locals as junior staff to maintain the rail tracks. It would not be a bad idea to extend this to senior cadres where suitable candidates exist to fill such vacancies in the areas to create a sense of belonging that is necessary for security of the infrastructure.

  • Trafigura, others in talks with marketers on fuel supply

    The Federal Government’s decision to deregulate the downstream sector appears to be paying off as globally acclaimed-oil trading institutions are approaching indigenous oil marketers for a deal, The Nation has learnt.

    The firms – Trafigura (Switzerland), Puma (Singapore), Noble Group (Hong Kong), and Archer Daniels Midland Co. (Illinois), Vitol Group (Swizerland), Mercuria Energy Group (Switzerland), and Cargill Energy Incorporation (Minnesota) – which are global firms with operations in North America, South America, Europe, Asia, Africa, have been meeting with major and independent marketers for a deal.

    According to sources, if the deal sails through, it would see the oil trading firms supplying fuel to marketers in Nigeria.

    An independent oil marketer, who spoke on the condition of anonymity, said partnership plans among marketers were ongoing, adding that the leadership of the Independent Petroleum Marketers Association of Nigeria (IPMAN) may speak on the issue.

    IPMAN’s President Chief Chinedu Okoronkwo confirmed the discussions.  He said it was difficult to rule out partnership among oil and gas operators within and outside the country since the industry has been deregulated.

    He said deregulation has created room for competition, adding that the best way operators could maximise the gains of deregulation is to go into partnership.

    Okoronkwo said: “In view of the recent deregulation of the downstream sub-sector of the oil and gas industry, the country should be expecting huge supply of petroleum products soon.  The reason is because marketers and major oil trading firms are discussing to achieve that goal. Trading firms, such as Trafigura, Puma and others have been coming to Nigeria to hold meetings with marketers on how to supply them fuel, and further establish an enduring relationship with them.

    “The firms want to start bringing fuel to Nigeria. They have spoken to many marketers and the response has been quite good.  There would be increase in the supply of fuel in the country soon, a development, which would engender competition in the industry.”

  • Flexible forex: marketers strategise for growth

    Fuel marketers are leveraging on their relationship with refineries abroad to make the best of the flexible foreign exchange (forex) regime, which implementation began last Monday.

    It was gathered that the marketers have been discussing with refineries’ owners overseas to ensure efficient fuel supply, with a gurantee for payment.

    The National President, Independent Petroleum Marketers Association of Nigeria (IPMAN), Chief Chinedu Okoronkwo, said marketers will leverage on their contacts,  relationships with owners of refineries abroad, among  other factors, to buy fuel since the government has simplified the process of accessing forex.

    He said some marketers have collaborations with foreign refineries, adding that such marketers would rely on the partnership to import fuel into the country. He said marketers that have their own jetties would have unimpeded access to fuel, while those that do not have jetties would have the opportunity.

    Okoronkwo said that indices such as good assets, relationship and confidence, are what marketers need to make the best of opportunities provided by the new forex policy. He said marketers will access forex at relatively cheaper rates, import fuel, sell it, make gains and fresh purchases, and instill confidence in the minds of firms that sell fuel abroad.

    “Marketers will benefit greatly from the forex policy. The reason is because the flexible forex policy would provide them with the opportunity to play better in the industry. The policy would enable marketers to access forex at relatively cheaper rates, import and sell fuel, make gains and fresh purchase, and instill confidence in the minds of firms that are selling fuel abroad. Business thrives on confidence between two parties or more. Through the policy, marketers are sure of getting opportunities to buy forex. As a result of this, marketers would be bringing fuel into the country. Once marketers are getting returns on investment (RoI), they would not hesitate to buy more fuel,  a development, which would go a long way in building confidence in the owners of refineries abroad.’’

    He said marketers would not run out of fuel during the new regime, assuring that there would not be fuel scarcity again. Marketers, Okoronkwo said, would be able to project how, when and where to buy dollars whenever they discover that the currency is scarce in the market, stressing that the issue would enable them to do a comparative analysis of happenings in the oil industry for growth.

     

  • Marketers worried over forex guidelines’ delay

    Marketers are worried  over the failure of the Federal Government to release the guidelines on the “flexible foreign exchange (Forex) regime” which provides them with multiple windows of accessing forex for fuel importation.

    They said they were yet to benefitt from the provision weeks after the guidlines were issued. Independent Petroleum Marketers Association of Nigeria (IPMAN), National President Chief Chinedu Okoronkwo, said his members were waiting for directives on  how to source for forex.

    His members, he said, had been importing fuel before  flexible forex was introduced, adding that they hoped the initiative would boost their operation.

    Okoronkwo said “Already, marketers have been placing orders for fuel abroad, and do bring fuel into the country. We have not stopped importing petroleum products. However, we are waiting to know the full details of the new scheme tagged: “Flexible forex regime” as contained in the guidelines.  We would like to have indepth knowledge of the scheme before we let the public know how our members intend to key into it.”

    The Chief Executive Officer, Petrocam Trading Nigeria Limited, a downstream operator, Mr. Patrick Ilo, said marketers are anxious to know what the  guidelines on ‘flexible forex regime’ looked like in view of the fact that it was expected to impact positively on their activities

    He said his firm, like others in the sector, are banking on the guidelines to improve growth.

    Ilo in a chat with The Nation during the opening of Petrocam solar powered mega station in Ajah, Lagos, said the guidelines would favour marketers who would import fuel into the country.

    He said with the guidelines in place, marketers are sure of accessing forex for fuel importation, thereby improving supply. Ilo said: “Though Petrocam started operation before acute shortage of forex began a few months ago, the firm has managed to survive.  Amid this, the Federal Government brought the idea of flexible forex regime.  We at Petrocam are waiting for the guidelines on the regime. I’m confident that the period of waiting for the guidelines would be over soon. When this happens, marketers would source forex at relatively cheaper rates and import more fuel into the country.’’

    The Federal Government introduced ‘flexible forex’ in order to enable marketers source forex independently.  The idea replaced the old and cumbersome method of sourcing forex from the Central Bank of Nigeria (CBN) window by marketers.

    “Flexible forex is said to be a less cumbersome and varied means of sourcing for forex by importers of fuel and other consumables into Nigeria. But we are waiting to see the guidelines that would provide clarity on the issue, he added,” he said.

    The flexible forex was introduced following the increase in price of fuel from N86.50 per litre to N145 per litre and high exchange rate of dollar to naira.

  • Marketers set to increase LPG price

    Marketers set to increase LPG price

    Liquefied Petroleum Gas (LPG) marketers yesterday in Lagos, agreed to increase the price of the domestic cooking gas by between 70 per cent and 100 per cent, following the scarcity of the product.

    The marketers lamented that problems, such as rising cost of buying LPG from terminal owners such as Pipelines and Product Marketing Company (PPMC), Algasco and others were taking toll on them. They also highlighted hitches in the supply chain, and monopoly as reasons behind the planned increase in the price of LPG.

    The Executive Secretary, Nigeria Association of Liquefied Petroleum Gas Marketers (NALPGAM), Bassey Essien, who spoke a stakeholders’ forum in Lagos, said the cost of obtaining LPG from terminal operators has increased in the past few days. He added that the development necessitated a corresponding increase in the price of the product.

    He said: ‘’Last week Tuesday, marketers bought 20 metric tonnes of LPG from terminal owners for N2.4million; the price rose to N2.6million on Thursday;  N3milliion on Friday; and  N3.5million  this Monday. “Based on this, marketers have agreed to increase the price, at which they are selling LPG to both the individual and industrial users.  “This is the only way marketers can recoup their investments and grow. By this, people would now be filling 12.7kilogramme cylinder with for between N3, 500 or N4, 000, as against N2, 800.’’

    Essien said NAFGAS and PPMC terminals are mostly used for distribution of LPG while other terminals are sparingly used.

    He said: ‘’As a result of this, most terminals are deliberately starved of gas. This means that marketers have no choice but to buy LPG from PPMC and NAFGAS terminals at a higher price.  In the light of this, the two firms are controlling the LPG market, by determining who to sell LPG to. Often times, few marketers have benefitted, while others have not. From all indications, a monopoly has been overtly or covertly created in the LPG market;  whenever a system is monopolistic in nature, few individuals or firms dominate business activities.”

     

  • Marketers key into govt’s downstream deregulation

    Marketers key into govt’s downstream deregulation

    •Import 90m mt of fuel

    Marketers have begun aligning with the Federal Government’s policy on subsidy removal. They have begun to source foreign exchange (forex) on their own, and have imported over 90 million metric tonnes (mt) of fuel in the last 12 days, The Nation has learnt.

    The period covers May 11 to 23, after the Federal Government announced the new fuel pump price of N145 per litre.

    It was gathered that marketers, including the independent ones, such as NIPCO and Capital Oil, among others, have begun sourcing for forex for fuel importation to support the Federal Government’s policy of moving away from fuel subsidy.

    One of the marketers, who spoke on condition of anonymity, said no fewer than seven fuel cargoes have arrived in the country in the last two weeks. The source said each vessel contains 15,000 million metric tonnes of fuel, which translates to over 90 million metric tonnes of fuel.

    The source said the vessels arrived in Nigeria within two days and have discharged fuel to marketers, adding that marketers are not leaving any stone unturned to key into the government’s downstream deregulation programme.

    The source said: “Many of the jetties that are designated by the Federal Government to deliver petroleum products to marketers have been busy in the last few days.  There are increased activities at the North Oil Jetty (NOJ), Petroleum Wharf Jetty (PWJ), and Bop Oil Plant (BOP) in recent times. The marketers discharge fuel from the jetties for onward distribution to their outlets nationwide. Based on this, the marketers have embraced the government’s deregulation policy.”

    The National President, Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr. Chinedu Okoronkwo, confirmed this, saying his members have been using their own forex to import fuel.

    He said: “The process of importing fuel by marketers is going on. Many of the marketers have contacts and information to leverage on to bring in fuel.I quite believe that the issue of sourcing of forex for fuel importation will not be a major problem.

    Also, the Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN), Obafemi Olawore, said it would take time to ensure compliance whenever the government announces a new policy. He, however, said his members have been importing fuel since the Federal Government increased the pump price from N86.50 per litre to N145 per litre.

    “As we speak, we (major marketers) have made some imports. Two of our marketers are even discharging fuel now,” he added.

  • Oil marketers plead with FG not to devalue naira

    Oil marketers plead with FG not to devalue naira

    Independent oil marketers have raised the alarm that any devaluation of the naira by the federal government before offsetting their foreign exchange differentials may not augur well for the downstream oil industry.

    Addressing the Minister of Finance in Abuja on Friday, members of the Depot and Petroleum Products Marketers Association (DAPPMA), led by Prince Dapo Abiodun, said they were worried that if anything happens to the naira, they may not be able to bid for forex (foreign exchange) and as such may not be able to liquidate their forex liabilities with their foreign bankers.

    Dapo Abiodun said bankers had made it practically impossible to import fuel during the Goodluck Jonathan administration transition to the Buhari administration but expressed appreciation that the Buhari administration released some payments shortly after it came to power.

    Abiodun said oil marketers were bidding to liquidate foreign exchange liabilities to their foreign bankers and lamented that many of the naira denominated liabilities were sitting idle because of the unavailability of forex.

    The oil marketers thanked the federal government for the recent release of N42.6 billion payment made last week. But they were quick to remind the finance minister that they had not received the money yet.

    Responding, the Minister of Finance, Mrs Kemi Adeosun, said government was determined to do what is needed to resolve all issues surrounding availability of petroleum products in the country.

    Adeosun noted that her ministry has changed the payment process with a director supervising the exercise so that oil marketers can track their payments.

    The minister lamented that liabilities to oil marketers was one of the many liabilities this administration inherited from the past government. But she assured the oil marketers that government does not want to run up any more forex differentials.