The Independent Petroleum Marketers Association of Nigeria (IPMAN) has issued a warning regarding a potential fuel shortage that could affect the entire country. This announcement comes amid rising tensions and disputes between IPMAN members and the management of the Nigerian National Petroleum Company Limited (NNPCL), raising concerns over the supply chain of petroleum products.
During a press conference held in Ilorin on Friday, IPMAN’s National Public Relations Officer, Alhaji Okanlawon Sulaiman Olanrewaju, discussed the challenges facing marketers. He attributed the looming fuel scarcity to the increasing costs of petroleum products, a situation that has been exacerbated by disagreements with NNPCL regarding pricing and supply logistics.
Olanrewaju expressed his deep concerns regarding the current pricing structure set by NNPCL for marketers. According to him, NNPCL is selling fuel to marketers at ₦1,010 per liter, which is notably higher than the prices offered at its own retail outlets. This disparity has placed a significant financial burden on IPMAN members, making it increasingly difficult for them to operate sustainably.
He further highlighted that IPMAN has directed its members to halt operations, which could lead to severe fuel shortages as existing supplies dwindle, thereby disrupting distribution and access to fuel for consumers across the nation. The directive reflects the urgent need to address the untenable pricing situation that marketers are currently facing.
Moreover, Olanrewaju voiced his opposition to the suggestion of reinstating the fuel subsidy, arguing that such a move would undermine the current established processes and could lead to further complications within the market dynamics.
“The problem IPMAN is facing in the downstream oil sector is confounding,” he explained. “We realize that what NNPC is imposing on us is too much. NNPCL is the sole off-taker from Dangote oil refinery, and the amount the NNPCL wants to sell to us is too high.”
Olanrewaju continued, stating, “NNPC wants to sell at ₦1,010 to IPMAN. This price is even higher than what NNPCL sells at their retail outlets after including transportation costs. That’s a very difficult situation they are putting us in.” He emphasized the challenges marketers face in maintaining profitability when forced to sell fuel to the public at prices that do not allow for adequate margin coverage.
He lamented that IPMAN members may struggle to survive under such circumstances, noting, “Definitely, it’s like they want to tag us as bad marketers.” This situation has led to increased frustration among the association’s members, as many feel trapped in a challenging market environment.
Olanrewaju described the current state of affairs as unacceptable, stating, “We don’t really know why they are doing that, but definitely, we’ll not accept it. It won’t work.” His remarks underscore the determination of IPMAN to stand firm against unfavorable conditions imposed by NNPCL.
Additionally, he revealed that IPMAN members have collectively deposited about ₦15 billion into the NNPCL account for several months without receiving the promised products. This amount corresponds to approximately two to three cargoes at the old price of ₦750 per liter. He expressed frustration that NNPCL is now seeking to increase the price after months of waiting, further complicating the relationship between marketers and the national oil company.
“They’ve asked us to top up the money paid to them before we pick the product. We cannot continue doing that,” Olanrewaju stated, emphasizing the financial strain on marketers who rely on timely access to fuel supplies. “Our president has instructed that every member of the IPMAN should stay put until further notice as we’ll be having our NEC meeting on Wednesday next week. It means that marketers will not pay that money until our discussion.”
Reflecting on the economic implications of the situation, the IPMAN spokesperson noted that many marketers take loans from banks to fund their operations, which are subject to high-interest rates. “Economically, what they want us to do doesn’t sound good. We sourced the money from banks, and we’re paying money for it. We all know the way the interest rate is going up in banks,” he stated.
Olanrewaju acknowledged the progress made in the industry but cautioned that there may be challenges ahead. “Achievements have been made. There may be some hitches along the line, but it’s better we take these steps. It may be tough now. The step the government is taking is good. By the time we’re in full deregulation, it’s going to bring about real competition in the downstream oil sector, which is good for the economy.”
He concluded with a call for reform in the market, stating, “NNPC should not be the sole taker of Dangote fuel. If it opened up, the price would crash down. Now, we are not finding it easy because we can’t plan our business.” His statements reflect a desire for a more competitive market that would benefit both marketers and consumers in the long run.