There are indications that the Federal Government is still battling to restore normalcy in the supply chain of the Premium Motor Spirit (PMS) otherwise known as petrol as long queues and black market remain visible despite last week’s upward price adjustment.
Vanguard findings across several locations show many petrol stations were still shut in Lagos and its environs, as well as Abuja metropolis.
The findings also indicated that most independent marketers have not received improved supplies while some major marketers have run out of stock due to overwhelming concentration of demand on them.
Consequently, prices remain much higher than the new pump price of N855 per litre with independent marketers selling at between N900 and N1,000 per litre. In some locations outskirt of Lagos, the prices were more than N1,000/ltr.
Many black market dealers selling in kegs were seen hawking the product at between N1, 200 and N1, 400 per a litre in different parts of Lagos and Abuja.
FG defends petrol policy
Meanwhile, President Bola Tinubu, yesterday, said the removal of subsidy on petrol, is targeted at freeing up budgetary resources for critical investments.
Tinubu spoke on Tuesday during the 17th annual Chartered Institute of Bankers of Nigeria (CIBN) banking and finance conference in Abuja.
Vice-President Kashim Shettima, who represented him at the conference, said his administration has taken steps to reform Nigeria’s macroeconomic environment, with a focus on restoring confidence in the nation’s economy.
He stated: “We have taken bold steps to reform the macroeconomic environment. Our focus is on restoring confidence in the Nigerian economy through measures aimed at reducing inflation, stabilising the foreign exchange market, and improving fiscal management.
“Though painful in the short term, the removal of fuel subsidies is designed to free up budgetary resources for critical investments in infrastructure and social services, frequent adjustment of the monetary policy rate, a move aimed at curbing inflation and fostering a more market-oriented exchange rate system.”
We will supply 25m liters through Dangote this Sept. – Edun
Also speaking at the event, Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, assured that government would alleviate transportation costs by enhancing supply with 25 million liters starting in September, through the Dangote refinery.
He added that procurement of biofuel buses and compressed natural gas (CNG) conversion kits would receive greater attention.
The minister acknowledged that food inflation remained a significant challenge. “The consumer price index eased from 34 percent in June to 33 percent in July, but food prices continue to rise sharply,” he said.
Why scarcity is persisting – Marketers
Speaking on the sustained long queues at petrol stations, Managing Director, 11Plc, Mr Tunji Oyebanji, said: “The queues exist because the confidence of customers has not yet been restored.
“Everybody is rushing to the petrol stations because they are thinking of scarcity. However, if the supply remains steady as it is currently, before next week, the queues will disappear.”
But petroleum marketers generally acknowledge the existence of supply gap across the country while blaming it on the failure of Dangote Refinery and the NNPC Limited to reach an agreement on off-taker price for the product.
The shortage has also continued despite the announcement by Dangote and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, that the refinery was ready to truck out petrol.
Speaking to Vanguard, the National President of the Independent Petroleum Marketers Association of Nigeria, IPMAN, Alhaji Abubakar Maigandi Shettima, said marketers were still struggling to raise the new capital required to load a truck.
While calling for a quick resolution in the off-taker price, Shettima noted that if the situation persists, independent marketers would be forced to negotiate directly with Dangote Refinery.
He said: “At the time the pump price was increased there was already scarcity of petrol and when that happened we had to recalibrate our pumps which took some time.
Secondly, the money we had was no longer enough to load trucks. It means marketers have to approach their banks for extra loans to be able to meet up and this is not easy.
“While we have been told by NNPC that the product is available, getting additional loans from the bank is a big challenge”, he stated.
He noted that to permanently resolve petrol supply challenges, the refineries in the country need to become functional.
“NNPC also needs to fix their refineries and make them functional just like Dangote has done. We have not had a meeting with yet but if things continue like this, we will have to talk to him because he needs us”, he added.
Experts propose solutions to petrol crises
Commenting on the sustain crises in the petrol services, the National President, Oil and Gas Service Providers Association of Nigeria, OGSPAN, Mazi Colman Obasi, said: “The government should do everything possible to increase supply on a sustainable basis. The public also should avoid panic buying so as not to worsen the situation.”
On his part, another expert, who pleaded to be anonymous, said: “The government and other parties should address all issues currently affecting supply. Issues hindering supply by the Dangote Refinery should be addressed.
“Also, deregulation should be very practical in order to encourage increased participation of all players in the downstream.”
Recently, the Executive Vice-President, Downstream, NNPC, Adedapo Segun, had said: “If you look in section 205 of the PIA (Petrol Industry Act), that’s the Act that gave birth to NNPC Limited, it tells you that petroleum prices or fuel prices were based on unrestricted free market conditions. And so, when you have a situation where fuel prices remain the same, that’s what is unusual, you won’t see that in other climes, where you have prices fixed for a long period.
“It’s actually supposed to move in consonance with changes and market conditions. During the summer months, prices are high because it’s a driving season, in the winter months, prices come down and things like that. So, that’s what the PIA provides for, prices should move with the seasons.” (Vanguard)