The Federal Government on Wednesday said it was currently engaging oil
marketers on issues bordering on the cost of Premium Motor Spirit,
popularly called petrol, fuel queues, bridging claims payment, among
others in the downstream oil sector.
It was reliably gathered in Abuja that the meeting might lead to an
upward adjustment in the pump price of petrol, as oil marketers had
repeatedly blamed the persistent fuel queues in various parts of
Nigeria on the unsustainable cost of PMS.
This came as the Major Oil Marketers Association of Nigeria on
Wednesday joined their counterparts in the Independent Petroleum
Marketers Association of Nigeria and the Natural Oil and Gas Suppliers
Association to call on the government to gradually raise the price of
PMS.
IPMAN and NOGASA had earlier pushed for the upward review of petrol
price, as some members of IPMAN had already effected this by selling
above the N165/litre government approved price.
Some of them currently dispense petrol at N180/litre and above in many
states including Abuja, Lagos, Ogun, Imo, Niger, among others.
When informed on Wednesday about the demands of the various marketers
groups, the General Manager, Corporate Communications Department,
Nigerian Midstream and Downstream Regulatory Authority, Kimchi Apollo,
told our correspondent that the government was currently engaging the
oil dealers.
“We are meeting them now on the various concerns, so don’t worry. By
tomorrow you will know what is the outcome,” he stated.
Apollo added, “The NMDPRA is engaging them in a meeting that is
ongoing, so I’ll let you know the outcome. Hopefully by tomorrow you
will know the outcome of the meeting.”
Asked if the meeting was being held with just MOMAN or all oil
marketers, the NMDPRA spokesperson replied, “We cannot engage only
MOMAN, we are engaging all of them. We are engaging them so don’t
worry. You will know the outcome later.”
The sole importer of petrol into Nigeria – the Nigerian National
Petroleum Company Limited, however, insisted that it was not a
regulator of oil prices and would not comment on whether the cost of
petroleum products would be raised on reduced soon.
“If you can call Shell and ask them for comments on petroleum
products’ prices, then you can call us (NNPC) and ask us for such
comments,” a senior official at the oil firm, who pleaded not to be
named due to lack of authorisation, stated.
The source added, “We don’t have any kind of regulatory function in
the sector, we are just operators now. It is the government that
manages that. And based on the Petroleum Industry Act, we are no
longer an appendage of government.
“The company is owned by Nigerians and the government is holding it in
trust, but we don’t have any governmental role in terms of pricing,
control or whatever. Although we are mandated to be the supplier of
energy security, we are not a regulatory body.
“So we don’t control the price, we don’t regulate price, we have no
control over any of those, as well as other similar issues.”
The Chairman, MOMAN, Olumide Adeosun, made the call during a briefing
with journalists on Wednesday.
According to him, the impact of the Russian/Ukraine war on businesses
is “immense”, hence, the call on the federal government to gradually
phase out subsidy to avoid “shock”.
“The effect of the Russian/Ukraine war cannot be compared to what we
experienced during the covid. What we are seeing is that countries are
beginning to close borders against importers and products are being
reserved for their own citizens alone. So Nigeria is also being shut
out,” he said.
Speaking further, Adeosun said the Nigerian government has ran the
subsidy regime for too long, adding that the huge fund reserved for
subsidy should be diverted into growing other sectors such as
Agriculture, health, education and others.
“The Federal Government has allowed subsidy for too long and we
haven’t saved for the raining days. The subsidy keeps increasing to
the tune of N4 trillion. Such money would have been invested into
Agriculture, health, education and others”
The Senate had in April approved N4trn for fuel subsidy in 2022
following two separate requests by the Nigerian president to the
National Assembly.
The MOMAN chairman further said selling petrol at N165 per litre is no
longer sustainable due to the rising costs of diesel.
Findings showed that price of diesel had increased from N266/litre in
October 2021 to above N800/litre currently.
“MOMAN is not short of empathy for Nigerians at this time. The
association is pro-business, pro-progress and pro-human.
“We, therefore, stand for phased deregulation of the downstream sector
because we don’t want subsidy to be removed all of a sudden in order
not to throw the masses into shock. We can no longer sell petrol at
N165 because diesel is what we use in our operations. We use diesel to
power our trucks, run our stations and depots, and as we all know,
price of diesel keeps rising.
“The options we have now is to either save our businesses by shutting
it down, or that the government should allow a gradual phasing out of
subsidy by allowing price increase gradually.
“It is better to have products at a slightly increased price than not
have products at all. The money for subsidy should be injected into
another sector. No government can make the current crisis go away
because it is a global one, and we all have to adjust,” he said.
Also recently, the Minister of State for Petroleum Resources, Timipre
Sylva, described the controversial subsidy regime as “a criminal
enterprise.”
A source in the know had told The PUNCH that oil marketers and the,
Nigerian Midstream and Downstream Petroleum Regulatory Authority also
known as The Authority, had last week, secretly agreed to slightly
increase price from N165/litre to between N175-N180/ltr.
Just retired Group Chairman/CEO of International Energy Services
Limited, and a PhD holder in Petroleum Process Economics from the
University of Ibadan, Dr. Diran Fawibe, said the fuel supply crisis
had become like a Pandora’s box which had defiled all solutions.
The Chief Executive Officer of Centre for the Promotion of Private
Enterprise, CPPE, and former Director General, Lagos Chamber of
Commerce and Industry, LCCI, Muda Yusuf, told The PUNCH that the
current price is not sustainable.
Gas supply debts
Meanwhile, the Nigerian Gas Association has called on the Federal
Government to clear the legacy gas supply debts in the power sector,
describing it as an impediment to progress.
The President of the association, Ed Ubong, made the call in a press
statement sent to The PUNCH on Wednesday.
According to Ubong, as soon as the government cleared the backlog of
debts, only then could it hold private stakeholders accountable for
promises made to bolster the sector with more gas supply.
Ubong noted that while members of NGA in tandem with the government
were seeking innovative solutions for the sector, end-users also
needed to adopt gas as a viable and clean source of energy during the
decade of gas.
He further asked the government to institutionalise gas-powered
generator usage for federal and private parastatals that use
generators of more than 250KVA capacity.
Hike hits Kano
Meanwhile, fuel marketers in Kano on Wednesday arbitrarily hiked their
prices from the regulated price of N165 per litre to between N200 and
N220 at different outlets in the metropolitan city.
Prior to the development, motorists in the city had been experiencing
fuel shortages at filling stations, which had lingered for the past
two months.
Our correspondent visited some filling stations on Wednesday and
discovered that some outlets on Airport road, as well Paniso and
Bompai areas had commenced the sale of petrol to motorists at prices
ranging from N200 and N220.
However, at A.A Rano filling station, on Bompai road by Central Hotel
roundabout and Aliko petrol station, at Paniso by Jaba, the product
was sold for N185 per litre.
During a chat with a fuel attendant at A. A. Rano, who declined to
have his name in print, it was confirmed to our correspondent that the
price was hiked since Tuesday.
Also, at Amkar petrol station on Airport road, the product sold for
N220 per litre. The attendant at this filling station said the price
increased to N220 last week.
A motorist interviewed at Amkar petrol station on Airport road,
Ibrahim Baba, decried the hike, stressing that the government had
insisted that the price would be pegged at N165 per litre.
“It is so sad that I can only afford 15 litres of fuel at this price
of N220 and surprisingly the NNPC has been advising motorists against
engaging in panic buying and that the price remains N165 per litre,”
he said.