It has become clear that the Nigerian domestic fuel market is in acute supply crisis, setting a stage for a possible clash between the marketing groups in the sector and regulatory authorities over bursting of pump prices ceilings. The two parties yesterday sharply differed over the causes of the prevailing high prices of petrol and kerosene in the country, with the Department of Petroleum Resources (DPR) accusing the marketers of sharp market practices aimed at double-dipping. At a meeting between DPR officials and representatives of marketing groups in Lagos, both parties traded blames for the precarious supply situation in the market, and vehemently differed on the causes of price violations at the retail pumps.
In a signal that posted a deep frost in relationship, Major Oil Marketers Association of Nigeria (MOMAN) and Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) snubbed the meeting and neither sent delegate nor letter of regrets. Whereas DPR accused the marketers of taking payments from government and denying citizens of the benefits of the subsidy sponsored by government under the Petroleum Support Fund (PSF), the defiant marketers pointed at the failure of the Nigerian National Petroleum Corporation (NNPC) to meet its supply obligations to the marketers.
In a statement delivered on his behalf at the meeting, Director of DPR, Mr. Mordecai Ladan, issued stern threats to marketers to comply to the subsidized prices or face exclusion from the PSF regime which guarantees refunds to marketers selling at government controlled retail rates. It would be recalled that the Major Marketers Association of Nigeria (MOMAN) had constantly cried out over protracted delay in payment of their outstanding subsidy claims valued at over N250 billion. They warned that the debt would affect their capacity to sustain supplies to the market.
The Depot And Petroleum Products Marketing Association of Nigeria (DAPPMAN) had also decried the impact of subsidy debts on the operations and also took the same position as MOMAN on further importation of products. Official market supplier, NNPC, had earlier in the week, issued a statement assuring motorists and sundry consumers that it has robust stock of petrol to meet full internal demand in the short to medium term.
Group Managing Director of the corporation, Dr. Joseph Dawha, had assured that NNPC was taking a sustainable measure to permanently address supply concerns in the market with the ongoing phased rehabilitation of the Port Harcourt Refinery expected to produce five million litres of PMS daily to displace importation and associated subsidy controversies. Mr. Ladan who was represented in the meeting by DPR’s Deputy Director in charge of downstream operations, Mr. Alphonsus Mudei, declared that the agency has an accurate data of the nation’s stock level, and added that there was no reason for the market to suffer supply shocks at the moment.
In accusing the marketers of manipulating supplies to extort more money from the system, he said: “DPR would not allow a situation whereby supply of PMS is dictated by the private interests of marketers and dealers to the detriment of the Nigerian public, neither will the Department condone any act of selling PMS above official pump price in government licensed facilities under any guise whatsoever.”
He warned “those of you who still engage in the practice of selling PMS and DPK (kerosene) above government stipulated prices or who engage in acts of hoarding these products to desist in the interest of the public, the economy and your business.” But in taking a defiant position on the issue, representatives of Independent Petroleum Marketers Association of Nigeria (IPMAN) blamed the resort to patronize private sources of supply for price rascality in the market, saying procurement form NNPC’s depots across the country could no longer sustain retail business in the country. Vice Chairman, Western Zone of IPMAN, Mr. Kunle Bamigboye, told the regulators that the retail players in his group obtain petrol at rates that are already above the official N87 per litre price, arguing that the dealers needed margins to make the products available to motorists in the first place.