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Tag: Mike Osatuyi

  • BREAKING: IPMAN makes u-turn

    BREAKING: IPMAN makes u-turn

    Following directives to its members in Borno and Oyo States to shut down fuelling stations, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has made a u-turn.

    Recall that the Borno and Oyo States chapters of IPMAN had directed members to shut down their fuelling stations while ordering members to stop buying products from source.

    However, in a retraction Borno IPMAN Chairman, Mohammed Kuluwu stated: “Having met with the concerned authority, all filling stations should open with immediate effect.

    “Continue selling while the association continues with further consultation and accordingly keep you informed”.

    Meanwhile, IPMAN’s National Controller of Operations, Mike Osatuyi described the memo to members, which emanated from the IPMAN Borno chapter, asking all its members in the State to suspend services, as a wrong move.

    “Fake news. Bad eggs and sabotage,” Osatuyi said while speaking with The PUNCH on Tuesday over the phone.

    Also, the National President of IPMAN, Elder Chinedu Okonkwo when contacted said Kuluwu should not have issued the statement credited to him.

    “He should not have issued the statement. In fact, he has retracted it,” Okonkwo said.

    Recall that on Sunday, the IPMAN’s Public Relations Officer, Ibadan Depot, Mojeed Adesope was said to have also issued a similar statement ordering IPMAN’s members in Oyo State to stop buying products and shut down their stations.

  • Fuel scarcity bites harder as MOMAN jerks pump price to N185 per litre

    Fuel scarcity bites harder as MOMAN jerks pump price to N185 per litre

    There is no respite for Lagos residents over the lingering fuel scarcity as Major Oil Marketers Association of Nigeria (MOMAN) has increased the price of petrol to N185 per litre without official notification.

    Fuel scarcity persisted on Friday as long queues disrupted traffic flow resulting to gridlocks across the Lagos metropolis.

    Some of the stations visited like Mobil, Conoil, TotalEnergies, Nipco, Enyo, Forte and NORTH-WEST had adjusted their pump price to reflect N185 per litre against N169 previously.

    Motorists in Lagos who queued for several hours at filling stations operated by major marketers were shocked to notice the adjustment of the pump price.

    Many major filling stations in Lagos metropolis, especially Ikeja and Agege areas were not dispensing, only a few stations were dispensing while motorists scrambled to fill their cars.

    The stations dispensing at Mobolaji Bank Anthony, Grammar School, Berger were NNPCL station and Bovas along Ogunnusi/Isheri road.

    Also, Mobil filling station at Agidingbi-Ikeja started selling with queues extending to Fela Shrine from Ashabi Cole Crescent/CIPM Avenue road.

    It was also observed that some independent filling stations were selling between N260 and N270 per litre along Ikorodu, Somolu, Bariga, Ikotun and Akran, Awolowo road.

    Some marketers who preferred anonymity told NAN that the federal government had begun the subsidy withdrawal, urging marketers to adjust their pump price.

    The marketers claimed that government may have commenced a gradual removal of the petrol subsidy.

    However, efforts to get reactions from MOMAN and Independent Petroleum Marketers Association of Nigeria (IPMAN) was unsuccessful as key marketers’ associations were still considering an appropriate pump price.

    A source who declined to be mentioned said, “Marketers have been officially directed to change the pump price of petrol.

    “Go to stations operated by major marketers you will confirm what I have told you.

    “But I think it shouldn’t be above N185 a litre. I can tell you too that depot owners are not expected to raise their prices but they have been asked to recover their costs by adjusting their prices.”

    The cost of fuel pump increased from N87 per litre as of December 2015 to N165.77 by December 2021, which is an increase of 90.54 per cent, according to the Fuel Pump Price Per Litre – Average (PMS) data from the Central Bank of Nigeria (CBN).

    Mr Mike Osatuyi, the National Operations Controller of IPMAN, said his members were still waiting for the Nigerian National Petroleum Company Ltd. (NNPCL) to fulfill its part of the agreement reached at the meeting by supplying them fuel directly instead of the present arrangement where they had to buy from a “third party.”

    Osatuyi regretted that despite the change of leadership at the NNPCL retail arm, the situation had remained the same.

    “We reached an agreement with NNPCL for direct fuel supply since last month, but up till now, we are yet to get the supply.

    “We are still buying from private depots who sell the product to us at N230 per litre and by the time it reaches our stations it is at N250 per litre.

    “So, we cannot sell at government regulated price because we don’t even get it at regulated price,” he explained.

    According to Osatuyi, supply issues are yet to be resolved and that is why the major marketers are not selling regularly.

    Besides, Osatuyi said some of the filling stations selling at the regulated price of N180 per litre were only putting up an appearance in the public, whereas behind the scene, from their depots, they sold the commodity to private marketers at N220 per litre.

    “That is why some of them don’t have fuel to sell in their stations as they would have made more money selling to the independent marketers at a higher price,” he said.

    He regretted the situation IPMAN found itself because its members were not comfortable selling fuel at N250 or more per litre, but that their hands were tied as they could not run at a loss.

    “Even some of our members are wondering if we have compromised on this issue because they cannot believe that by now NNPCL would not have started selling fuel to us at the official price as agreed in that meeting,” he said.

    Osatuyi has assured that the group will confirm to Nigerians when NNPCL starts dispensing fuel to its members at the official price and Nigerians should expect reduced price of PMS if NNPCL fulfills its promise of direct supply to his members.

    “This is what we have been clamouring for because IPMAN has been buying petrol for N220 from private depots in this period.

    “Whereas NNPCL supplies the product to depots at N113 per litre, while depots sell at N148.17 per litre and filling stations sell at the regulated price of N170 to N180 per litre.

    “Instead of selling to IPMAN at the approved N148.17 per litre, as they used to do before, private depots were selling to us at N220 per litre, so how could we have sold to the public at N170 per litre?” Osatuyi asked..

    Mr Clement Isong, the Executive Secretary of MOMAN refused to answer questions on the pump price increase.

    Isong said despite the volume that the NNPCL was supplying, the demand for the product kept rising, suggesting there was increase in demand from states.

    On why the demand for petrol is high, he said, “I don’t know but I suspect that it is cross-border demand that has gone up.”

    Efforts to get the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and NNPCL to comment proved abortive as both refused to pick their calls and respond to messages.

  • Why Nigerians are experiencing fuel scarcity – IPMAN

    Why Nigerians are experiencing fuel scarcity – IPMAN

    The Independent Petroleum Association of Nigeria (lPMAN) has attributed the current fuel scarcity to the unavailability of petroleum products and difficulty in accessing foreign exchange by marketers.

    Mr Mike Osatuyi, the Operations Controller of lPMAN, who made the remarks in an interview in Lagos on Sunday, said it had become necessary to inform the general public that the lingering scarcity of petrol was due to the unavailability of the product.

    He alleged that the Nigeria National Petroleum Corporation (NNPC) Ltd., had stopped importing enough petrol to meet demand in the country.

    Osatuyi was emphatic that marketers could no longer sell at the regulated price because the unsteady supply of petrol had resulted in higher prices at the depots.

    “We are experiencing scarcity because the product is not available. The price of a litre of petrol at private depots is currently between N205 and N210 as against N162.50.

    “The Nigeria National Petroleum Corporation (NNPC) Ltd., is the sole importer of refined petroleum products, which are not readily available to marketers,” he said.

    Osatuyi explained that his members bought petrol at over N200 per litre from private depots, making it impossible for them to sell at a regulated pump price.

    “Besides, such trend is unsustainable given the fact that private depots also sell the product at unofficial rate different from that of NNPCL.

    “When we add cost of transportation and levies, it will run into N217 per litre. At what prices do you want marketers to sell, knowing fully well that we are in business to make profit?

    “My members are groaning over increase in cost of petrol from depot and they suffer a lot to get it.

    “If fuel is there why will we not sell, but there is no fuel. Our members are selling petrol between N230 and N240 per litre at filling stations,” he added.

    Osatuyi said government was finding it difficult to continue subsidiasing the price of petrol and advised that the downstream of the petroleum sector be fully deregulated as a permanent solution to the problem.

    He urged the government to allow the private sector to import petrol as is the case with aviation fuel, diesel and kerosene.

    He urged government to remove the monopoly of importation and pronounce total deregulation of the downstream sector.

    Collaborating Osatuyi’s views, a marketer, who preferred not to be mentioned, told NAN that NNPCL was having challenges of importing refined product due to liquidity constraints.

    According to the marketer, all marketers; IPMAN, Major Oil Marketers Association of Nigeria (MOMAN) and Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) are struggling to get products from NNPCL, the sole supplier.

    The marketers said scarcity of foreign exchange also posed a serious challenge, and that the Direct Purchase and Direct Supply (DPDS) option had crashed.

    “Nigeria has reached a stage where government requested for credit facility from DSDP people on product supply but it was challenged due to huge backlog of debts.

    “The NNPCL partners who were given crude oil to supply refined products could not access credit from banks due to existing huge debts,” said the marketer.

    According to him, the high rate of forex currently at N800 to a dollar also posed a serious challenge to importation.

    He said, “Talking about Lagos, that is where most of the (PMS) vessels come. When the mother vessel comes into the state, its products will be distributed by daughter vessels to ports in Lagos, Warri, Port Harcourt, etc.

    “These daughter vessels are hired by independent private tank farm owners or private depot owners, who pay vessel charges in dollars.

    “Some of them source dollars in the open market. So, the dollar also determines the price of products.

    “Now, you cannot expect them to sell PMS at N184/litre when the price of hiring a vessel has risen from 38,000 dollars to around 108,000 dollars to 111,000 dollars, depending on the type of vessel. These charges are paid in dollars.”

    He added that the cost of chartering daughter vessels to move products from the mother vessel to the  Private Depot Owners (PDOs) has jumped within months due to issues around the hike in diesel cost, foreign exchange concerns and other industry problems.

    “The products are moved to PDOs in Port Harcourt, Warri, Calabar, Lagos, etc, and by the time NNPC gives depot allocations, it becomes their responsibility to charter vessels that will take the products from the mother vessel to the depots.

    “So, that lack of purchasing power in terms of sourcing dollars to evacuate products from the mother vessel, and absence of vessels to move products due to the hike in hiring cost also contributed to ghost scarcity of PMS across states.

    “Ghost scarcity means scarcity that appears and disappears. You may be going to work in the morning and everywhere will be clear, but in the evening you will see queues,” the marketer stated.

    He said the ex-depot price had gone above N205 per litre due to insufficient volume of petrol  to supply the entire market by  NNPCL.

    According to the marketer, many DAPPMAN members have closed shop because NNPCL is unable to cope with the demand of petrol and most of the product is channel to neighbouring countries.

    “About 50 per cent of the product is leaving the country, NNPC does not have any money to subsidise the entire West Africa, which is not realistic because they do not have money.

    “The best option and the way out is to deregulate the downstream sector, but currently, government cannot deregulate because it’s election period,” said the marketer.

  • Marketer says realistic cost of petrol is N200 per litre

    Marketer says realistic cost of petrol is N200 per litre

    An independent petroleum products marketer, Mr Mike Osatuyi has said the only realistic pump price of petrol is between N200 and N210 per litre.

    He disclosed this on Tuesday in Lagos while stressing that Federal Government’s pricing template that fixed pump price at N169 per litre is grossly unrealistic when the landing cost of the fuel at the station is N194 per litre.

    “I buy petrol at N186.50k per litre from the depot and it costs me about N9.50k to get the same litre to the pump after paying levies.

    “How do you want me to sell at N169 per litre when I have incurred additional costs? No marketer can sell petrol at the regulated price of N169 per litre with the current realities when landing cost is N196 per litre.

    “Those saddled with the responsibility of petroleum importation and pricing should be held responsible for the price disparities at the fuel stations.

    “The current price of petrol does not reflect inflation, Foreign Exchange costs, union dues and transportation,’’ Osatuyi, National Operations Controller of the Independent Petroleum Marketers Association of Nigeria (IPMAN), said.

    He stressed that government’s pricing template did not address current realities and pricing indices.

    “We should have a current template that will reflect current realities in petrol business pending the time that government would deregulate the sector fully.

    “There are some cost fundamentals, additional charges, and levies that are not factored into the template currently in use,’’ he noted.

    Osatuyi further disclosed that government should open up on petrol landing costs and the realistic price at the pumps.

    He stressed that a total deregulation of the downstream sector of the petroleum industry remained the best option.

    According to him, total deregulation remains the solution to address challenges in the downstream sector of the petroleum industry as it will allow interested investors to import freely.

    “Total deregulation remains the best solution to ending fuel scarcity.

    “The cost implication of total deregulation will make the price of petrol too expensive for Nigerians, but it will shift the burden from the government to end users,’’ he said.

    A correspondent who monitored fuel stations in Lagos reports that majority of fuel stations belonging to independent marketers sold petrol at between N180 and N200 per litre.

    Major marketers selling at the official pump price of N169 per litre had long queues, the correspondent reported.