Depot owners to NNPC: N117 per litre of fuel is too high

Economy

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Private depot owners are lamenting Nigerian National Petroleum Corporation’s (NNPC’s) decision   to sell Premium Motor Spirit (PMS) to them at N117 per litre, admitting that the price is not only outrageous, but not cost effective. The depot owners  include members of Major Oil Marketers Association of Nigeria (MOMAN) and Depot and Petroleum Marketers Association of Nigeria (DAPMAN). In a telephone interview with The Nation, its Executive Secretary, Mr Femi Adewole, lamented that the N111 per litre price, which NNPC was selling fuel to them, was at an insignificant margin, wondering what will happen when the state-run oil firm has ncreased the price to N117. Adewole said NNPC’s  monopoly of fuel importation has compounded their woes. He said: ‘’By the time depot owners, who are mostly marketers,  add other costs incurred in the course of buying fuel from NNPC and later sell the product at the pump price of N145 per litre to  consumers,  they will be left with little or no profits.  More worrisome is the fact that NNPC controls fuel importation, a development which has compelled marketers to sell the product at a particular price. That is the situation we find ourselves. We are praying for solutions to problems inhibiting the growth of the industry, especially the downstream sub-sector.’’ The NNPC, Adewole said, sells fuel only to depot owners, who have Profoma Invoice, a development, which implies that any depot owner or marketer, who do not have Profoma Invoice would not be able to buy fuel. He said diesel price is deregulated, stressing that marketers are selling the product at between N220 to N230 per litre. Also, MOMAN’s Secretary, Mr Clemens Isong, said depot owners, including MOMAN members, have no choice than to buy the fuel at N117 per litre, being the price from the Department of Petroleum Resources (DPR). No depot owner or marketer, he said, can say he or she is making profit under the new price regime. A member of the Independent Petroleum marketers Association of Nigeria (IPMAN), who does not want his name in print, said why the NNPC increased the fuel price at which it was selling to depot owners may not be unconnected with the rise in the landing cost of fuel into the country. ‘’The NNPC may have considered the cost of importing fuel into the country, ditto the cost of storing the product, cost of logistics, among other variables.  When one considers  these variables, which in most cases are not static, one would see that the tendency by  NNPC to increase the price at which fuel is being supplied to depot owners is high,’’ the IPMAN member said. According to him, NNPC does not sell more than 10million litres to depot owner, stressing that the corporation has maintained that figure over the years. “What I observed in the downstream sub-sector is that NNPC has not for once sold more than 10million litres of fuel to any depot owner. The reason is simple. NNPC believes that no private depot can contain more than 10 million litres of fuel at a stretch,” he said. He said independent marketers buy fuel at N132.28 per litre from depot owners, not NNPC.

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