Why fuel scarcity may persist despite price increase – IPMAN

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has warned that fuel scarcity may persist in the country despite the increase in prices.

The association blamed the scenario on a disagreement between its members and the Nigerian National Petroleum Company Limited (NNPCL).

Speaking with journalists in Ilorin on Friday, the IPMAN national public relations officer, Okanlawon Olanrewaju, said the NNPC has imposed higher prices on marketers than the company was selling at its retail outlets.

The IPMAN spokesperson said NNPCL wants to sell at N1,010 to marketers.

“The problem IPMAN is facing in the downstream oil sector is confounding. We realise that what NNPC is imposing on us is too much. NNPCL is the sole off-taker from Dangote oil refinery and the amount the NNPCL wants to sell to us is too high.

“NNPC wants to sell at N1,010 to IPMAN. This price is even higher than what NNPCL sells at their retail outlets after including transportation cost. That’s a very difficult situation they are putting us. We may not be able to survive in that kind of situation because we’ll have to sell to same members of the public. Definitely, it’s like they want to tag us as bad marketers”.

Mr Okanlawon, who described the situation as unacceptable to marketers, said that, “We don’t really know why they are doing that but definitely, we’ll not accept it. It won’t work.

“Presently, our members have paid a lot of money, about N15 billion, into NNPCL account for months and they’ve not given us the product. This is for about two to three cargoes at the old price of N750 per litre. And now they want to increase the price after about three or four months.

“They’ve asked us to top up the money paid to them before we pick the product. And that’s what they have been doing always. We cannot continue doing that.

“Our president has instructed that every member of the IPMAN should stay put until further notice as we’ll be having our NEC meeting on Wednesday next week. It means that marketers will not pay that money until our discussion”, he said.

The IPMAN spokesperson said marketers take loans from the banks to fund their businesses, adding that the loans attract high interest rates.

“Economically, what they want us to do doesn’t sound well. Because we sourced the money from banks and we’re paying money on it. We all know the way interest rate is going up in banks. They also go to banks even with better negotiation powers than us individual marketers.”

The IPMAN official said the stay off directive of the association to marketers could lead to non-availability of fuel, “because by the time we didn’t pick product for sometimes and we start exhausting what we have, definitely, there’s going to be scarcity”.

But Mr Okanlawon opposed the call for return to the fuel subsidy regime, saying “returning to the subsidy era will distort all the process already in place.

“Achievements have been made. There may be some hitches along the line, but it’s better we take these steps. It may be tough now. The step the government is taking is good. By the time we’re in full deregulation, it’s going to bring about real competition in the downstream oil sector which is good for the economy.

“NNPC should not be the sole-off taker of Dangote fuel. If it’s opened up, the price would crash. We the IPMAN members are not finding it easy because we can’t plan our business,” he concluded.

NNPCL has said it will not be a middleman for the Dangote refinery or sole off-taker of its products. However, due to supply shortage aggravated by logistics problems in the distribution process, the national oil company has been the sole off-taker since the refinery opened last month.