January 30, 2023

NMDPRA blames smugglers as petrol scarcity lingers

FG puts stock at 1.6bn litres

By Udeme Akpan, Energy Editor

THE Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, weekend, put the nation’s petrol stock at1.6 billion litres.

The regulator also disclosed that the Nigerian National Petroleum Corporation, NNPC, has made adequate plans to supply additional product into the market in the coming months.

The agency Nigeria’s prolonged petrol shortage was fuelled because of the activities of cross-border smugglers diverting the product to other nations.

It made it public that efforts were being made to rehabilitate bad roads in order to enhance petrol supply nationwide; adding that, NMDPRA and key stakeholders, including NNPC have put various measures to tackle scarcity.

Specifically, it stated: “The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) wishes to reassure all Nigerians that there is PMS sufficiency of over 1.6 billion litres as of 26th January 2023 both on land and marine.

“NNPC has additionally made firm commitment to supply more volume of PMS for the months ahead to guarantee national energy security and nationwide availability at government regulated price. 

“The current distribution hitch is heightened by activities of cross-border smugglers, who divert PMS meant for Nigerian market to neighbouring countries where PMS prices are significantly higher than Nigeria’s regulated price. We are engaging and collaborating with the Nigeria Customs Service to address this issue.

“The price arbitrage between Nigeria and neighbouring countries has continued to grow due to inflation and the regional impact of the Russia-Ukraine conflict on global energy value chain including international freight rates and coastal vessels charter rates.

“We wish to bring to public knowledge that the ongoing government effort to rehabilitate strategic Nigerian roads ahead of the rainy season has necessitated rerouting of tanker trucks conveying petroleum products to alternative roads, therefore increasing transit time and associated cost of product transportation. NMDPRA and key stakeholders including NNPC have put various measures to address the issue”.

According to the agency, these included: “Modest adjustment in the cost of product transportation to cater for the impact of high AGO price on transporters, while making special provision of diesel to marketers at a reduced price.

“Automation of products sales interface. Emplacement of a monitoring system in collaboration with government security agencies for distribution of products to retail outlets. Extended operating hours both at the loading depots and some selected filing stations.

“Rehabilitation of critical fuel distribution road network through tax credit scheme by the NNPC, regular stakeholders’ engagements, among others.

“We have reinforced our monitoring teams and appropriate sanctions to checkmate the activities of erring marketers who are distorting our planned product flow to designated outlets in order to profiteer from price arbitrage.

“As a medium to long term measure, cost-efficient means of transportation, including Autogas conversions and pipeline rehabilitation, are being implemented. This will be complemented by end-to-end process automation across the value chain.

“NMDPRA appreciates the collaborative efforts of some patriotic oil marketing companies who, despite the glaring incentives to engage in illegal price arbitrage, have stood steadfast and operated responsibly within the approved pricing limits.

“We would like to reassure all Nigerians that NMDPRA as a responsible regulatory authority would continue to work passionately to ensure energy security and continuous collaboration with all the relevant stakeholders to restore normalcy in the Premium Motor Spirit supply and distribution network within the shortest possible time.”