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Tag: Petrol Marketers

  • Petrol marketers writes Tinubu that our diesel price is too cheap – Dangote Refinery

    Petrol marketers writes Tinubu that our diesel price is too cheap – Dangote Refinery

    Marketers of petroleum products in Nigeria have reportedly written to President Bola Tinubu to complain that the drop in price of Dangote Refinery’s diesel to N900 per litre, is negatively affecting their businesses.

    Devakumar Edwin, Vice President, Dangote Industries Limited, disclosed this on a Twitter Spaces session organized by Nairametrics.

    “Petroleum product marketers in Nigeria have written to President Bola Tinubu to complain that the refinery local prices which have dropped from N1,200 to N1,000 and now N900 per litre are impacting their businesses negatively,” he said.

    Edwin highlighted some of the challenges facing the Dangote Refinery and its impact on Nigeria’s fuel supply and prices.

    According to him, the refinery, located in the Lekki Free Zone near Lagos, struggles to sell about 29 tankers of diesel per day due to low patronage from local petroleum product importers.

    “As a result of this poor local patronage, the refinery exports most of its diesel and aviation fuel,” he said.

    Edwin had earlier said Dangote Refinery products would be exported if the Nigerian National Petroleum Company Limited and other petroleum dealers in the country refuse to patronise it.

    “We have been exporting aviation fuel, we have been producing kerosene, we have been producing diesel, but yesterday, we started the production of PMS. So, that was the last stage. The only thing now left out is petrochemicals.”

    “So, the good news for the country is we have started producing PMS from our refinery,” he had said on a radio programme.

    Asked if the petrol would be sold locally, Edwin replied, “Well, I explained how there has been a kind of a blockade from lifting our products within the country. The traders have been trying to block (it), and so now we have been exporting our petroleum products. PMS, we are ready to pump in as much as possible to the country.

    “But if the traders or NNPC are not buying the product, obviously, we will end up exporting the PMS as we are doing with the aviation jet and diesel,” he declared.

    Edwin expressed surprise that the company started facing different challenges it never expected when the refinery was set to commence operations.

    He recalled that the philosophy initially was to add value to the raw materials available in the country, regretting that Nigeria is still exporting crude and importing refined petroleum products after over three decades.

    “The philosophy is to take the crude, and instead of exporting the crude, refine it, add value; export the finished products, and supply the finished products locally. But unfortunately for us, we started facing challenges with the crude supply.

    “What is happening today? We are struggling to get the crude. We are now importing the crude from the US, we are importing from Brazil, and from other parts of the world. So, the whole philosophy has gone upside down. After all these decades, we are exporting crude, importing products,” he added.

    “The same thing is continuing. We are not getting enough crude allocation, and the crude is still being exported. We are forced to import crude from outside. Yes, we are getting some crude locally, but it’s not adequate.”

    Dangote Refinery, with a capacity of 650,000 barrels per day, started naphtha exports in March, low-sulphur straight run fuel oil (LSSR) exports in May, and began selling diesel and jet fuel domestically in April.

    In June, it started exporting diesel fuel meeting European specifications.

     

  • If subsidy is removed petrol price could jump to N800/litre – Oil marketers

    If subsidy is removed petrol price could jump to N800/litre – Oil marketers

    The oil marketers in the country have hinted that the price of Premium of Motor Spirit (PMS) could hit N800 a litre if the subsidy on the product is totally  removed.

    Recall that there has been a scarcity of PMS for the past few months and it has caused many filling stations to either hoard the product or increase the price.

    Many different filling stations now sell between 200 and 270 depending on the franchise and area its situated with fuel attendants also charging between 200 and 500 on the product depending on the volume being bought.

    Industry operators had repeatedly stated that the high cost of subsidy on petrol was a burden on the Nigerian National Petroleum Company Limited and was contributory to the prolonged crisis in the downstream oil sector. NNPC is the sole importer of petrol into Nigeria.

    Similarly, the Minister of Finance, Budget and National Planning, Zainab Ahmed, recently hinted that government will hands off subsidy completely on the product, saying that by June 2023 government would hands off completely.

    However,  oil marketers simply known as Shuaibu  hinted newsmen  that while it could be advisable to remove subsidy, Nigerians should know that the cost of petrol could cross N800/litre once the commodity was no longer subsidised.

    They urged the Federal Government to ensure that all the necessary measures and infrastructure to ensure a less stressful subsidy removal regime were put in place before implementing the decision.

    “If the government fails to take the appropriate measures, and they say they want to remove fuel subsidy, the situation will be worse than this, the masses will suffer. How can you remove subsidy and you don’t have this product (petrol),” the Secretary, Independent Petroleum Marketers Association of Nigeria, Abuja-Suleja, Mohammed Shuaibu, stated.

    He added, “If the government removes subsidy, where is the product? If you are removing subsidy, maybe by that time, the way diesel is sold at between N800 – N900/litre, we could be buying petrol at N800/litre, if not more than that.

    “This is because the product will be scarce, even from the government cycle. So the government should tell Nigerians the truth about this fuel supply crisis. It is not a problem caused by marketers.”

    Shuaibu said oil marketers were ready to sell, stressing that when marketers got products a few weeks ago, the queues disappeared.

    “But as it is today, you have black marketers everywhere selling with jerrycans and you will ask, where are the security agencies and the regulators?” he asked.

    The IPMAN official added, “By tomorrow they will claim that it is the fault of the marketers. How? We are businessmen and every businessman wants to make a profit. You know the law of supply and demand. When the product is scarce, prices will rise, and vice versa.”

    He explained that the downstream sector was not structured for adequate competition, adding that this could also pose challenges when subsidy was eventually removed.

    He said, “By the time you are removing subsidy, you should know that the market is not properly opened and there is no competition. They always tell you about Dangote Refinery. We must understand that Dangote is a privately owned company.

    “The pipelines of that facility were not even designed to run in any Nigerian state, rather it was designed to run to neighbouring countries, and maybe that one in Lekki there, that is all.

    “So, more or less, that refinery might still exploit us, because when there is no competition, the only supplier calls the shots. For had it been that as Dangote is producing in Lagos, another person is producing in Warri, while one refinery is pumping in Abuja, then there will be competition.”

    He continued, “We can see, for instance, the competition in the telecommunications sector today. But the government will continue to deceive us that Dangote Refinery will come on stream, when we know that it cannot really solve the problem.”

    He argued that most of the pipes of the refinery were laid to neighbouring countries to supply them gas, stressing that Nigeria should not completely rely on the facility.

    “They should not continue to be singing it as if it is what will solve our fuel supply problems,” the IPMAN official stated.

     

  • BREAKING: Fuel scarcity looms as petrol marketers threaten strike over N50bn bridging claim

    BREAKING: Fuel scarcity looms as petrol marketers threaten strike over N50bn bridging claim

    Days to the Christmas celebrations of 2021, petroleum marketers under the aegis of Northern Independent Petroleum forum have threatened to embark on an industrial strike action over N50 billion bridging claim.

    TheNewsGuru.com (TNG) reports the forum’s chairman, Alhaji Musa Maikifi made this known in a statement issued on Sunday in Kano State.

    Maikifi in the statement stressed that the federal government through the Petroleum Equalization Fund was yet to settle the N50 billion Bridging Claim for over nine months.

    According to him, failure to settle the claims may force many out of business and lead to scarcity of fuel in the North, adding that the majority of its members have ran out of capital, hence could not buy and transport fuel to the region.

    According to the statement, Maikifi made the lamentation during a meeting with the Forum’s members from the nine depots across the Northern states, at Ni’ima Guest Palace in Kano on Saturday.

    He said for the past nine months they had made efforts to get their money paid but in vain.

    “If this continues in this way so many of us will have to close down our fuel stations. This will add to the fuel scarcity in the region because the marketers have no capital.

    “The Federal Government couldn’t settle our claims of over N50 billion. We met the authority involved and they promised to pay us but yet they haven’t.

    “So, that is why we are here to plead with them to pay us our unsettled claims so that we can continue our business smoothly,” he lamented.

    According to him, they formed the Northern Independent Petroleum Marketers Forum to always have one voice that will speak on their behalf, adding that the leadership crisis rocking the IPMAN has also added to their burden which their Forum is ready to address.

    Alhaji Zarma Mustapha, said the bridging claims were supposed to have been paid within two weeks but for months now they are not settled, and that over 3000 marketers from the north are involved.

    “One thing that will surprise you is that this money does not belong to the Government. It is generated from the consumers that purchased fuel from us marketers and the NNPC gathered the money and then pay us through PEF. But still they hold our money.

    “Presently you can see that there is fuel scarcity here and there in the north, and if we enter January, February without our claims settled, I assure you that we can’t do it, we can’t do the business,” he said.

    He urged President Muhammadu Buhari and the Minister of State for Petroleum to intervene into the matter to help them sustain their business.