Energy
Another Round Of Fuel Crisis Looms, PMS Goes For N900/Litre
The streets of Lagos and Abuja, Nigeria’s economic and political capital cities, respectively, appear to be drifting into another round of energy crisis, with Premium Motor Spirit (PMS), popularly called petrol, selling for N900/litre.
Biztellers reports that this follows the raising of ex-depot price of petrol from N630 to N720/litre by private depot owners.
The immediate response of petrol stations within the Lagos and Ogun States axis has been to declare scarcity, which has triggered panic among the populace.
It was gathered some dealers were reluctant to purchase products at the new rates from the private depots.
The National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Hammed Fashola, was cited by The PUNCH as declaring that many filling stations did not open for business because they had no fuel in their tanks.
READ ALSO: Economic Conspiracy: Dangote Accuses IOCs Of Plotting Against Nigerian Refinery
According to Fashola, the Nigerian National Petroleum Company Limited, which is the sole importer of petrol at the moment, should explain to Nigerians what was happening with the product.
In his words, “Those that shut their stations do not have fuel to sell. When you don’t have fuel, you cannot open your station. That is the problem. You know the NNPC is the sole importer of this product. I think it is in the best position to tell us what is actually going on.
“Currently, independent marketers cannot buy what the private depots are selling. They are selling fuel between N715 and N720 per litre. How much will marketers sell the product? Look at the cost of bringing it to their depots; with transportation and other depot expenses, it will be too costly for them. That is why the stations are shut down.
“Some marketers refuse to go and buy because they know the masses cannot afford high-priced petrol in this economy. That is the situation for now.”
Biztellers reports that private depot owners, used to sell petrol to independent marketers at the rate of N630-650/litre, while the NNPC Ltd was selling to major marketers at a price below or around N600.
The pending negotiations between the IPMAN and the NNPC Ltd for direct supplies to its members has not borne fruits.
Biztellers gathered that the NNPC Ltd, instead of seeking a lasting solution was focused on a temporary reprieve by pressuring the private depots in Apapa to prioritise supply to Abuja to dispel mounting fuel queues.
Industry watchers are tracing the short supply to the Lagos and its environs, to the efforts to solve the queues mounting in the Abuja area by shifting supply focus there.
Energy watchers are concerned because the signals appeared too soon after the Reuters averred that Nigeria’s debt to PMS suppliers had surpassed $6bn, doubling the figure as at April. It traced the surge to NNPC Ltd’s failure to bridge the gap between fixed pump prices and international fuel costs.
The Reuters report had asserted that the crisis had long brewed with part of January imports, put between $4bn and $5bn still outstanding to suppliers.
The debt pile-up is being managed, according an unnamed industry source, with “the $250,000 a month (per cargo) for late payment compensation,” the PUNCH wrote.
Even at that, at least two suppliers were said to have stopped participating in recent tenders after hitting self-imposed debt exposure limits to Nigeria, meaning they would not supply more PMS until they receive payments.
As a consequence, Reuters noted, Nigeria’s tenders to buy gasoline in June and July were smaller.
The NNPC Ltd was expected to import via tender about 850,000 tonnes in July, according to the Reuters report quoting sources, down from the typical one million tonnes in previous months.
As that is brewing, some private depot owners have been showing reluctance to supply petrol to independent marketers, who own the larger percentage of the filling stations in Nigeria.
The depot owners on their part, claim they could only distribute what they were supplied by the sole importer, the NNPC Ltd.
One of the depot owners, was cite thus, “Currently, we focus on our filling stations. We get less than 50 per cent of what we usually get from the NNPC now.
So, we make sure we feed our stations first before we consider selling to independent marketers. That is why most of them are out of stock. You know they don’t have access to the NNPC and the little we get is not even enough for our stations,” by The PUNCH.
The IPMAN president had fingered the supply chain, “The current situation is a result of the way private depot owners have been selling their products. It has been very difficult for independent petroleum marketers to get the product and sell it in Abuja and neighbouring states, as well as in other states in the North.
“So the queues you are seeing now are because of the cost of PMS by private depots. The private depots are selling at N710/litre, but if you check the price of the same product at NNPC retail outlets, it is N617/litre.
“Therefore, by the time we independent marketers buy from private depots and bring it to our filling stations, we will not be able to sell our product because our cost price is already so high, while the cost at NNPC retail outlets is far lower.
“And you know that when we buy it at the rate of N710/litre we have to add transportation cost again because there is no equalisation. And when we add the cost of transportation, the pump price is going to be higher than the N710/litre ex-depot price, whereas NNPC stations sell at N617/litre.”
He maintained that the number of stations operated by IPMAN, meant that any distortion in the supply of products to its members would eventually lead to fuel queues because major marketers and NNPC stations are fewer.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has projected a significant reduction in petrol prices once the Dangote Petroleum Refinery begins direct sales to oil marketers.
Speaking in an interview with Channels Television, IPMAN spokesperson Chinedu Ukadike said the association is in talks with the Dangote Refinery to secure direct lifting rights for Premium Motor Spirit (PMS), commonly known as petrol.
Read Also: JUST IN: CBN Pushes Economy Harder With Steep Interest Rate Hike To 27.25%
This move comes after the federal government directed the refinery to sell exclusively to the Nigerian National Petroleum Company Limited (NNPC), with other marketers required to buy from the national oil firm.
He explained that bypassing middlemen by allowing marketers to source petrol directly from the refinery would cut unnecessary distribution costs, leading to lower prices at the pump for consumers.
Ukadike said, “We have written to Dangote, and he has responded positively, indicating readiness to discuss with us. We believe that these discussions will soon yield results, and whatever agreement we reach will be shared with Nigerians. We want to take our products directly to cut off all these unnecessary price hikes.”
Addressing public concerns about independent marketers being driven by profit, Ukadike reaffirmed IPMAN’s commitment to ensuring fair and affordable fuel prices for Nigerians.
He also expressed optimism that the collaboration with the Dangote Refinery, alongside the anticipated reopening of the Port Harcourt Refinery, would help resolve bureaucratic bottlenecks and stabilize petrol prices across the country.
The $550 million upstream gas project between the NNPC Ltd and TotalEnergies on the development of the Ubeta field has taken off, the Presidency announced on Tuesday.
This was contained in a statement in Abuja, on Wednesday, by the Chief Corporate Communications Officer, NNPC Ltd, Olufemi Soneye.
ALSO READ: NNPC Confirms Petrol Purchase From Dangote In Dollars, Naira Transactions Commence Oct
According to Soneye, the Special Adviser to the President on Energy, Olu Verheijen, made the disclosure during an inaugural US-Nigeria Strategic Energy Dialogue, hosted by the U.S. State Department in Washington, DC.
“The signing ceremony of the 550 million USD Final Investment Decision (FID) on the Ubeta Field Development Project took place in Abuja in June, this year,” he stated.
The Ubeta field, which was discovered in 1964, is located northwest of Port Harcourt, Rivers State.
It was gathered that at a luncheon organised as part of the inaugural US-Nigeria Strategic Energy Dialogue, Verheijen revealed that the upstream gas project would deliver 350 million standard cubic feet of gas per day when operational.
Verheijen added that major energy reforms introduced by President Bola Ahmed Tinubu since June 2023 focused on improving energy security, attracting investments, and deepening collaboration with key partners, including the US government.
She said the key reforms had improved the viability of the gas-to-power value chain of the country.
The reforms, according to her, included initiatives to improve cash flows in electricity distribution through smart metering and the payment of outstanding debts owed investors and to reduce carbon emissions from gas production.
She added that the President issued five new executive orders to support the reform efforts, aimed at providing fiscal incentives for investment and reducing the cost and time of finalising and implementing contracts to develop and expand gas infrastructure.
The presidential aide said the directives are aimed to immediately unlock up to $2.5 billion in new oil and gas investments in the country.
Responding, the U.S. Assistant Secretary of the State Department’s Bureau of Energy Resources, Geoffrey Pyatt, said the dialogue was apt and strategic.
“The inaugural U.S.-Nigeria Strategic Energy Dialogue has set the stage for strengthened energy collaboration between the United States and Nigeria. Together, we’re advancing shared energy security, decarbonisation, and economic growth goals,” he said.
Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, led the Nigerian delegation to the event.
Officials from the Ministry of Power, Nigerian Upstream Petroleum Regulatory Commission, Nigerian Midstream and Downstream Petroleum Regulatory Authority, Nigerian Content Development and Monitoring Board, and NNPC Limited were also in attendance.
The U.S. delegation included representatives from the Bureau of African Affairs, USAID, the U.S. Department of Energy, the U.S. Trade and Development Agency, and the Export-Import Bank.
Joe Ajaero, the President of the Nigeria Labour Congress (NLC), has criticized the Nigerian government for its role in the current pricing dispute between the Nigeria National Petroleum Corporation Limited (NNPCL) and the Dangote Refinery, attributing it to erratic government policies.
In a press briefing at Murtala Muhammed Airport Terminal Two on Wednesday, Ajaero condemned the situation as fraudulent and argued that a deregulated market should encourage competition and consumer choice, not impose restrictive pricing.
He asserted that the attempt to regulate Dangote’s pricing or influence private sector costs undermines fair market practices.
Related News: Fuel Crisis Looms As NCSCN Urges Dangote Refinery To Address Fuel Pricing, Supply Issues
Ajaero called on Nigerians to voice their concerns, claiming the government’s actions are undermining the private sector’s ability to set prices.
He said, “For a product produced here, he didn’t import with dollars, there was no landing cost, and they want him to sell it at the same cost as what they are bringing from abroad. That is fraudulent and unacceptable.”
Additionally, Ajaero criticized the government for not repairing the refineries as promised in August of the previous year, noting that no progress has been made as of September 2024.
On the subject of the N70,000 minimum wage, Ajaero assured that implementation is on track according to the agreement made on April 18, 2024.
He confirmed that the National Assembly has approved the bill, and the committee on consequential adjustments is actively working on its rollout.
Kanu’s Legal Team Barred By DSS Following Judge’s Step Down
BREAKING: EFCC Arrests Former Taraba Gov, Ishaku
79th UNGA: Mastercard, Nigeria Join Forces To Transform Africa’s Agric Sector
Don’t Touch Interior Minister, Remove Minister Of Power Instead – VDM Tells Tinubu
Bobrisky: ‘See You In Court’ – Falana’s Daughter, Folakemi Tells VeryDarkMan
JUST IN: Oscar-Winning Actor Maggie Smith Passes Away
Sahara’s Tonye Cole resigns from GPHCDA
Oando opens ultra-modern petrol station in Lagos
Niger Delta Avengers: President Buhari Reads riot Act …considers the carrot and stick option
Adeosun: We are investing in infrastructure to grow the private sector
Shell launches Nigeria campaign on energy efficiency
