…Say PPMC sells N138.362 per litre to retail outlets, N113 to depot owners
…Petrol stations sell from N147,50 to N150 per litre
…CUPP flays fuel hike
By Dayo Johnson, Dapo Akinrefon, Michael Eboh, Ola Ajayi & James Ogunnaike
Oil marketers, under the aegis of Independent Petroleum Marketers Association of Nigeria, IPMAN, and Petroleum Products Retail Outlets Owners Association of Nigeria, PETROAN, yesterday, bemoaned the confusion fostered on the downstream sector of the Nigerian petroleum industry by the Federal Government, warning that Tuesday hike in the price of petrol would negatively impact oil marketing companies.
This came as majority of the petrol stations across the country adjusted their pump price to between N147.40 and N150 per litre, from N143 at which most of them sold the products earlier yesterday.
Already, the Coalition of United Political Parties, CUPP has described the increase “an insensitive and wicked infliction of pains on Nigerians.
Recall that the downstream subsidiary of NNPC, Petroleum Products Marketing Company, PPMC, had on Tuesday in a memo by its Manager, Sales, Mohammed Bello fixed ex-Depot of petrol to 138.62 per litre with directive to take effect from August 5th 2020.
According to the memo, ex depot price of diesel was fixed at N160 and N165 per litre for Lagos and Oghara respectively, while ex depot for kerosene was 160 per litre.
Speaking with Vanguard in Abuja, National President of PETROAN, Dr. Billy Gillis-Harry, advised the government and its agencies to desist from arbitrarily fixing the price of Premium Motor Spirit, PMS, also known as petrol and engage all stakeholders before arriving at prices.
He further disclosed that at the new ex-depot price of N138.62 per litre for PMS, the, PPMC, actually hiked the price of the commodity by around N30.30 per litre, forcing marketers seeking to purchase 30,000 litres of petrol, to source for additional N900,000.
Gillis-Harry informed that with the hike in ex-depot price, marketers would be compelled to sell at a minimum of about N148 per litre, while in extreme cases; the price of PMS could be sold as high as N170 per litre.
The PETROAN president also accused the government of price disparity in fixing the new ex-depot prices, stating that while the commodity is sold to retail outlets owners at N138.62 per litre, the PPMC is selling the commodity to tank farm owners at N113 per litre.
“The PPMC set the amount tank farms can buy from it at N113. Who are the tank farms owners selling to? They are still selling to PETROAN members. This leaves PETROAN members with two choices; we either go to the government depots to buy at extra N30, which is N138.62, or we go to private tank farms and buy at N5 more.
“With this action, the PPMC is closing the government depots; and we are all going to patronize the private depots, because they would have about N25 margin. They can now decide to sell at N10 profit and share the remaining other ones. If that is the idea, at the end of the day, all the federal government depots that taxpayers money had been used to build would be moribund. There is so much in the issue that needed to be seen and addressed.
If you really want to talk about return on investment, and when you spend N138.62 per litre to buy from depots, which does not include logistics and loading expenses. By the time you add loading expenses, it is now going to be about N3 to N5 per litre, depending on the terrain you are buying and taking it to; which comes to about N143, N144 per litre.
“If that is the price at which you bought, how much profit are you envisaging for you to remain in business; you cannot sell less than N5 to N10 per litre. You can see this is why we said government should allow market forces to determine the prices.”
“Now, on the prices, the first problem that has come is confusion. In Kano, IPMAN members are selling at N150 per litre; in Port Harcourt, IPMAN members want to sell at N152; in Lagos, probably they are calculating to sell at N155. This is because there is no clear cut dynamics of how this has been designed.”
IPMAN sells PMS at N150
Meanwhile, South West chapter of IPMAN, while berating the PPPRA for what he described as “policy inconsistency,” directed members in the zone to increase the dispensing pump price of petrol from N143 to N150 in their respective filling stations.
IPMAN South West Zonal chairman, Alhaji Dele Tajudeen, who spoke with journalists yesterday in Abeokuta, among others, said: “Even after announcing the new ex-depot price, they should have fixed the pump price for marketers to prevent unnecessary debt. It is very disheartening to hear that a new price regime is coming to effect, without considering the plight of marketers who bought these products at an expensive price
“The Federal Government needs to know that some of us obtained loans from banks to run this business and we have to pay interest on them. We are still struggling with debts incurred before this increase with nothing to show for it, or how can somebody work with only N2.00, and yet we will pay workers, maintain the loan and also fulfill our obligations to the government.
“Yes, it is mandatory that we meet the needs of FIRS, pay state taxes, DPR fees, pay Weight and measure fees, pay salaries of our workers, pay union dues, pay our insurance fees and of course, buy diesel to power generators at our various filling stations. So, when we removed all these expenses we are left with almost nothing.”
Petrol stations’ prices vary
Meanwhile, most of the filling stations visited in Abuja yesterday, were selling between N147.40 and N148.70 per litre. In Ogun State, filling stations sold between N148 and N151 per litre.
It was sold for between N145 and N150 per litre in Ondo, while in Ibadan, Oyo State capital, most filling stations sold at N147.50.
Condemning the hike, Coalition of United Political Parties, CUPP in a statement by its Co-Spokesman, Mark Adebayo, amomg others, described the increase as “an insensitive and wicked infliction of pains on Nigerians who are yet to recover from the debilitating effects of Covid-19, which the present government did next to nothing to assuage the suffering masses and small scale businesses.
This government has demonstrated, time and again, that it lacks empathy for the suffering of the citizens under an economy that has been so terribly mismanaged due to its obvious incompetence and humongous corruption.
“We advise the government to immediately revert to either the N123.00 that it was reduced to during the lockdown or, better still, make it N100.00 flat which would cushion the combined negative effects of Covid-19 and the badly managed economy of the country.”