Abubakar Garima, the National President of the Independent Marketers Association of Nigeria, disclosed that the Nigerian National Petroleum Company Limited (NNPC) is currently instructing oil marketers to buy fuel from its depot at N1,010 per litre in Lagos.
He pointed out that this price is considerably higher than what the company paid to acquire fuel from the Dangote Refinery.
He mentioned that the company bought the product from the refinery at a price range of N800 to N900, but is now directing marketers to sell it at N1,010 per litre in Lagos, N1,045 in Calabar, N1,050 in Port Harcourt, and N1,040 in Warri.
Garima made this statement during his appearance on ChannelsTV’s Sunrise Daily on Thursday.
On Wednesday, NNPC retail stations increased petrol prices in Abuja from N897 to N1,030 per litre, while in Lagos, prices rose from N868 to N998 per litre. Similar price increases were observed in other regions, sparking widespread anger among Nigerians.
This is the second price increase in a month, reflecting a rise of about 14.8 per cent or N133.
With this recent price adjustment, petrol prices have surged by over 430 per cent in less than 17 months since the current administration assumed office on May 29.
Despite the anticipation of lower fuel costs by Nigerians after the introduction of naira-for-crude transactions, the IPMAN chairman explained that the recent fuel price hike is due to the effects of deregulating the sector.
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He said, “Well, we know now that we cannot call it an increase, but rather, we can call the removal of subsidy deregulation. Now, deregulation has started taking place fully.
“But our major challenge now is that independent marketers have an outstanding debt from the NNPCL and the company collected products through Dangote at a lower rate which is not up to N900 but they are telling us now to buy this product from them at the price of N1,010 per litre in Lagos, N1,045 in Calabar, N1,050 in Port-Harcourt and N1,040 in Warri.”
On why the marketers haven’t approached Dangote to get the product at the same price, Garima explained, “We have a problem with that because we have booked products through the NNPCL, and suddenly, when they decided to increase the price, they are now asking us to add more money to buy above what Dangote is selling to them.
“We have informed them to return our money to our banks so that we can go directly to Dangote for our supply. Presently, our money is with them, for about three months. We buy our products from them before loading. NNPC doesn’t sell on credit and when products are available, they call us to pick them up.
“But with the recent changes, we have requested that they sell to us at Dangote price or return our money. That’s the current situation and is the reason for the scarcity. We started negotiation yesterday.
“Dangote is selling to them around N800 to N900 and we are asking that it should be sold at that same price. We can decide to sell at a lower price of N1,020 or N1,010.
“We also refused to buy it because they bought it at a cheaper price from Dangote but want to sell it more expensive than the amount they currently sell at their stations. This is a great challenge because this will mean our price will be higher, and it also means they would have a profit of over N100 per litre.”
He added, “Marketers want to be fully engaged in the business of petrol and its components. The NNPCL has been the one bringing in the product and loading and has an offtake in Dangote Refinery.
“We are now being allowed to import and there is no challenge on that issue. What we are after is to get the product directly from Dangote and not through NNPCL. Currently, they are owing us up to N15bn.”
