Why petrol scarcity may resurface as NNPC increases prices

• The Independent Petroleum Marketers Association of Nigeria (IPMAN) has raised has disclosed that it is in disagreement with NNPC
• The national publicity secretary of IPMAN, Okanlawon Olarenwaju, disclosed that dispute might lead to petrol scarcity
• He said the NNPC insists on selling petrol to IPMAN members at N1,010 per litre, higher than the purchase price

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

Despite increasing prices, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has raised concerns over imminent petrol scarcity.

IPMAN said its members and the Nigerian National Petroleum Company Limited (NNPC) management disagreed.

IPMAN members protest the high cost of petrol by NNPC Credit: Bloomberg/Contributor
Source: Getty Images

IPMAN decries the high cost of NNPC petrol

IPMAN national publicity relations officer Okanlawon Olanrewaju disclosed that the current price at which NNPC sells petrol to marketers is too exorbitant and might cause another fuel scarcity.

He disclosed that the state oil company wants to sell petrol at N1,010 to the marketers, adding that the price is higher than it sells at its retail outlets.

According to Olanrewajum, the association's problem in the downstream sector is too much. As the former sole off-taker of Dangote Petrol, the NNPC sold the product too expensive to IPMAN members.

Punch reports that Olarenwaju disclosed that IPMAN members will not allow NNPC to impose an unbearable cost on them, which might be passed on to the consumers.

Marketers seek N15 billion refund from NNPC

He disclosed that the national oil company has tied down N15 billion of the marketers’ funds for several months and has refused to provide them with products.

He said the N15 billion is for about three cargoes at the former N750 per litre, saying that NNPC wants to increase the price after holding its members’ funds for three months.

The IPMAN spokesman said the NNPC is asking the association to add funds to the N15 billion to enable them to lift the product at the current prices.

He disclosed that IPMAN President Abubakar Maigandi has asked members to hold on until further notice as they will convene an NEC meeting on Wednesday, October 16, 2024.

Petrol scarcity is imminent

He says IPMAN members borrow money from banks, which accrues interest. 

Olarenwaju said the situation could lead to petrol scarcity as their members cannot lift petrol at the price NNPC is offering to sell to them.

He rejected the call to reinstate petrol subsidy, saying the move might distort existing processes.

He said:

“Achievements have been made. Some hitches may be along the line, but we should take these steps. It may be tough now, but the government's step is good. When we complete deregulation, real competition in the downstream oil sector will be created, which is good for the economy.

FG gives strict orders to oil marketers on Dangote petrol

Legit.ng earlier reported On Friday, October 11, 2024, the Nigerian government directed petroleum marketers to lift petroleum products, especially PMS, from the Dangote Refinery.

The government’s approval ends the Nigerian National Petroleum Company Limited's (NNPC) role as the sole distributor of the refinery’s petrol, leading to the total deregulation of the downstream oil sector.

Wale Edun, chairman of the Naira-For-Crude Sale Implementation Committee and minister of Finance, said the development is part of the government’s bigger plan to deregulate the petroleum market and encourage competition.

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Source: Legit.ng