The Depot and Petroleum Products Marketers Association (DAPPMA) on Sunday, December 24, released a statement signed by Olufemi Adewole, the association’s executive secretary, concerning the current fuel crisis in the country.
The Cable reports that the statement suggests that petrol shortages could only get worse unless the federal government increases fuel price or returns to paying subsidy to marketers.
The statement released by DAPPMA is quite different from the assurances given by the federal government and the Nigerian National Petroleum Corporation (NNPC) that the fuel crisis would soon disappear.
One of the issues raised in the DAPPMA’ s statement is that its members have stopped importing petrol because they could not sell at the fixed N145 price. The statement claims that the current fixed price does not cover their cost and there is no subsidy to make up for the difference.
The statement also stated that its members do not have petrol at their depots, as against accusations by the NNPC that they are hoarding it. DAPPMA also claimed in the statement that they have paid NNPC to supply them with the product but the corporation has not been able to do so. The statement noted that NNPC cannot supply the marketers because its contractors can no longer import dueto the rising cost.
NNPC, which used to import only 20% (the rest 15% by Oil Marketers Association of Nigeria, MOMAN), now imports 100%. Recall that DAPPMA used to account for 65% of petrol import before the economy turned against them. The statement said: “It is on record that any time NNPC assumes the role of sole importer there are issues of distribution, because it is marketers who own 80 percent of the functional receptive facilities and retail outlets in Nigeria.”
The indirect message suggested in the DAPPMA statement is that either petrol price is moved up to at least N170, which it calls “current import price of petrol”, or the federal government or NNPC resumes paying subsidy to cover the cost. Read their statement: “We all know that we presently run a fixed price regime of N145 per litre for PMS or petrol without any recourse to subsidy claims however we also have no control on the international price of crude oil.
“Current import price of petrol is about N170/ltr, NNPC, which absorbs attendant subsidy on behalf of the Federal Government, is the importer of last resort. “We understand that NNPC meets this demand largely through its DSDP (direct sale direct purchase) framework; however due to price challenges on the DSDP platform, some participants in the scheme failed to meet their supply quota of refined petroleum product, especially PMS, to NNPC.
This is the main reason for this scarcity. “The International price of PMS went up during the hurricane Katrina (that should be Hurricane Irma or Harvey, though — Katrina was in 2005) and has not dropped below USD$600/MT.
“Exchange rate of USD to the Naira is N306 for PMS imports and also interest rate our banks charge is above 25%. “Landing cost of PMS in Nigeria… means any of our members that imports would have to resort to subsidy claims, a policy already jettisoned by the Federal Government.”
The federal government ordered depot operators to engage in a 24-hour loading of petrol, in a bid to ease the long queues and scarcity witnessed across the country. The order was given by vice president Yemi Osinbajo when he met with minister of state for petroleum resources Ibe Kachikwu, managing director NNPC Retail, Yemi Adetunji, to Oando OVH, Mobil and Total terminals in Apapa, Lagos state on Monday, December 25. Osinbajo assured thaat President Buhari had instructed that everything should be done to ensure that current supply gaps are plugged to reduce the sufferings of Nigerians whose holidays have been marred by fuel scarcity.
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