LEADERSHIP can exclusively reveal that a significant number of filling stations nationwide are currently implementing fuel rationing for Premium Motor Spirit (PMS), commonly known as petrol. Fuel marketers have chosen to avoid importing petrol, resulting in this situation.
Despite a notable decrease in fuel consumption over the past few months, largely attributed to the increased fuel pump price, this rationing has not led to extensive queues at filling stations. However, LEADERSHIP’s investigation uncovered mild queues at petrol stations in several major cities, particularly in Lagos.
The mild queues witnessed in major cities, particularly Lagos, are anticipated to grow in the coming days due to the ongoing rationing.
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For more than a week, many filling stations in Lagos have been operating at reduced capacity, only selling for a few hours each day. Initially, marketers cited expectations of an upward price adjustment, a claim that the Nigerian National Petroleum Company Limited (NNPCL) promptly denied.
There have also been rumors of the federal government contemplating the reintroduction of partial subsidies to alleviate the impact of rising petrol prices. Although no official confirmation has been provided, this rumor has gained momentum. This potential move aims to address the escalating cost of living for the general population.
The source highlighted that this action appears to be the only available option for the government at this time since it lacks control over international crude oil prices, a key factor affecting the cost of imported refined products.
A reliable industry source confirmed that depots are running low on supply, substantiating the difficulties faced by motorists at filling stations.
The source revealed, “The truth is that marketers are not importing. The landing cost is above the ex-depot price at the moment, and access to foreign exchange is challenging.” She further explained that pricing issues with the NNPCL and the company’s decision to dictate selling prices for marketers contradict the principles of deregulation and competition.
While under deregulation, prices are not expected to continually rise, the unresolved exchange rate and forex scarcity issues are contributing to ongoing petrol price increases.
Previously, major petroleum product marketers and independent traders had resumed petrol importation after the federal government removed petrol subsidies. However, industry sources indicated that an unfavorable exchange rate had rendered the business unprofitable.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) had stated that some oil marketers had begun importing petrol into the nation, a role previously held exclusively by the Nigerian National Petroleum Company Limited (NNPCL). The NMDPRA CEO, Farouk Ahmed, mentioned that 10 out of 56 oil marketing companies that applied for licenses had demonstrated commitment, with three already importing fuel.
Furthermore, oil marketers have urged the federal government to address insecurity and suspend the 7.5% Value Added Tax (VAT) on diesel as part of efforts to improve operations in the downstream sector. They emphasized the need to tackle rising food and transportation costs to alleviate the hardship faced by citizens as a result of the recent sector deregulation.
Olumide Adeosun, Chairman of the Major Oil Marketers Association of Nigeria (MOMAN), commended the government for establishing a committee on fiscal policy and tax reforms and stressed the importance of these measures in the current challenging environment. MOMAN members confirmed their capacity to import petrol into the country, citing that their licenses are regularly renewed through the NMDPRA portal. Additionally, some are also importing diesel.
