Petrol Supply Stalls As Depots Operators Lament Inadequate Product

As Independent Depot Operators lament waning petroleum products supply by the Nigerian National Petroleum Company (NNPC) Limited, marketers have raised concerns that supply gap may affect return on investment.

LEADERSHIP learnt that supply hiccups are currently affecting effective products distribution across major depots operated by independent operators especially in Lagos.

The managing director and chief executive officer, MD/CEO, Winifred Akpani, MD/CEO of Northwest Petroleum and Gas Limited speaking on a panel session titled “Africa Fuels’ Update: Overview of Trends and Market Developments,” at the ongoing Oil Trading and Logistics (OTL) Africa Week 2023 in Lagos, said operations from importation to distribution to the end users have been stifled by the unstable dollar/naira exchange rate, leading to a high cost of operations.

Represented by the executive director of the firm Mohammad Salaudeen, Akpani said less than 10 per cent of the marketers licensed to import petrol since deregulation couldn’t because of the cost of operations.

“We’ve seen the Nigerian National Petroleum Company (NNPC) Limited retail stations not operating at some point. If NNPC stations (that are the big boys) are not operating, what happens to people like us?

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“The challenge today is that, firstly, we can’t import the product,” he said. “Secondly, the NNPC brings it in smaller volumes. So what will get to us…We’ll have to wait.”

According to the MD, when marketers put forth their request, it’s like they are in a queue, “when it gets to your turn, you’ll get it. That is the challenge as of today.”

“Unfortunately, we have to wait for quite some time for us to be able to move forward on this and that’s the position that marketers face.”

But speaking indifferently, national president of the Independent Petroleum Marketers Association of Nigeria, (IPMAN), Elder Chinedu Okoronkwo, said his association has a bulk purchase agreement with the NNPC and as such any breach will alter their business model and jeopardise members’ over N15 trillion investment.

Okoronkwo, said that at the moment NNPC portal is still open through which members make online products purchases.

“As I speak with you my members are loading at different depots across the country” he confirmed.

The confirmation thus dismisses reports that ninety per cent of depots operated by independent oil marketers are currently closed on the back of a lack of supplies caused by currency volatility and difficulties in the local distribution channel, industry operators say.

An industry source, earlier claimed that the NNPC has reviewed its policy on petrol supply to marketers.

According to our source, the current petrol scarcity is inflamed by the policy which denies marketers operating less than 30 filling stations opportunity to access products from the Company.

Though the NNPC spokesman, Femi Soneye did not respond to our call or reply our enquiry on the claim, the IPMAN president denied the insinuation saying that his members are steadily receiving supplies.

“Until NNPC shuts down the portal then we can confirm such a policy” he said.

Meanwhile, our Correspondents’ check at depots operated by Major Oil Marketers Association, (MOMAN), showed loading was going on.

Most of the depots are operated by Pinnacle, MRS, TotalEnergies and NipCo.

Meanwhile, at the OTL event, chief executive of the Nigerian Midstream and Downstream Petroleum Regulatory NMDPRA, Farouk Ahmed, said that eight wholesale petroleum product suppliers out of 94 licensed oil marketers were granted import permissions and supplied eight cargoes of PMS totaling 251,000 MT (291,238,670.69 litres) between June and September 2023.

He expressed confidence that the government’s efforts to restore the stability of the harmonised FX market will assist in the importation of Premium Motor Spirit (PMS), also known as petrol, by other oil marketing companies in addition to the state-owned oil companies.