Fuel Price Hike: IPMAN Plans to Stop Operations

The Independent Petroleum Marketers Association of Nigeria has threatened to stop operations nationwide, to protest the high cost of petrol being sold to its members.

IPMAN revealed on Thursday that the cost of petrol from the Dangote Petroleum Refinery to NNPC was about N898/litre, but noted that NNPC was selling the product to independent marketers at N1,010/litre in Lagos.

However, NNPC is currently selling the product at a subsidised rate of N765.99 per litre to members of the Major Energies Marketers Association of Nigeria, based on earlier arrangements, the company said in a statement.

Members of IPMAN, who make up over 70 percent of fuel station ownership nationwide, are seeking to purchase directly from the Dangote refinery- a move they believe would help cut the cost of the product, threatening to down tools if this fails and prices remain high.

This move could trigger fuel scarcity across the country.

The Association also demanded a refund from NNPC for earlier petrol supply payments made by its members.

National Publicity Secretary of IPMAN, Chinedu Ukadike, said the association may be forced to take action if the issue is not resolved soon.

Also, IPMAN says efforts to reach Dangote for direct loading were in progress and a meeting between both parties is expected to hold soon.

Ukadike also disclosed that its marketers would sell at a lower rate of N970/litre if they purchase products directly from the refinery.

The IPMAN official added, “Any moment from now, Dangote will invite us, from the fillers we have received.”

Earlier, IPMAN National President, Abubakar Maigandi, noted that NNPC was asking independent marketers to buy petroleum products from its depot at N1,010/litre in Lagos State.

Maigandi, who spoke during a live television interview on Thursday, argued that the price was higher than what NNPC paid for the product from the Dangote refinery.

He also noted that independent marketers’ funds had been held by the national oil company for about three months.

“Our major challenge now is that independent marketers have an outstanding debt from the NNPC and the company collected products through Dangote at a lower rate, which is not up to N900, but they are telling us now to buy this product from them at the price of N1,010/litre in Lagos; N1,045 in Calabar; N1,050 in Port-Harcourt; and N1,040 in Warri”, Maigandi stated.

 

‘Fully Involved’

He also pointed out that the association’s funds with NNPC had reached N15bn, stressing that marketers were eager to be fully involved in the petrol business and its components following the full deregulation of the sector.

He added, “Marketers want to be fully engaged in the business of petrol and its components. NNPC has been the one bringing in the product and loading and has an off-take in the Dangote refinery.

“We are now being allowed to import and there is no challenge on that issue. What we are after is to get the product directly from Dangote and not through NNPC. Currently, they owe us up to N15bn.”

Exclusive Purchase Ends

On Wednesday, NNPC raised the price of petrol at its retail outlets to N1,030 from N897/litre in Abuja, and N998/litre from N868/litre in Lagos with other locations witnessing similar price hikes accordingly.

However in the statement announcing the price change, the company said the increase in price followed the NNPC Ltd’s decision to terminate its exclusive purchase agreement with Dangote Refinery, thus, marking a significant shift in Nigeria’s fuel market.

To this end, “NNPC would no longer serve as the sole buyer of petrol from Dangote Refinery as it would be open to other marketers who can purchase fuel directly.”

The development is expected to create a competitive, deregulated market where prices will be negotiated on a “willing buyer, willing seller” basis, the statement noted.

In September, the NNPC said it was purchasing petrol from Dangote Refinery at N898.78 per litre but, reselling it to marketers at N765.99 per litre, thereby subsidising the product by N133 per litre.

Accordingly, the company declared that continuing the subsidy was unsustainable which led to the current price adjustment.

Between September 15 and 30, NNPC lifted approximately 103 million litres of petrol from Dangote Refinery, a small fraction of the 400 million litres originally planned for that period.

It was gathered from available records that only 2,207 out of the 3,621 trucks sent to the refinery were loaded, resulting in a 26% delivery performance.

In the meantime, other retail outlets across the country have also hiked prices to around N1200 per liter, a development that has triggered lamentations among Nigerians.

The price hike, the second in one month, represents about 14.8 percent or N133 increment.

Meanwhile, the Nigeria Labour Congress and the Organised Private Sector has called for the reversal of the hike in the pump prices.

 

 

 

 

 

 

 

PR/Punch/Hauwa Abu