The Nigerian National Petroleum Corporation has said that it
cannot sell Premium Motor Spirit, popularly called petrol, at a
loss, regardless of the demands of oil marketers, as it buys the
commodity at N116.28 per litre.
NNPC disclosed this while responding to claims by oil marketers
that the price of PMS being sold to them (marketers) by the
corporation was high and that this had led to the shutdown of many
oil marketing firms nationwide.
The Depot and Petroleum Products Marketers Association of
Nigeria had told our correspondent that the increase in the price
of PMS sold to them by NNPC from N111 per litre to N117 per litre
had made many marketers to close shop because they were not making
a profit, as exclusively reported in Sunday PUNCH.
The marketers also stated that a lot of jobs had been lost due
to the shutdown of businesses by oil dealers, adding that this
might trigger a widespread petrol crisis in the sector if not
handled adequately.
“The increase from N111 per litre to N117 was done by the NNPC
over a year ago and marketers have been finding it tough, which is
why most marketers are no longer in business. I have written
letters several times that it should be reversed and that is why a
lot of marketers are no longer importing,” the Executive Secretary,
DAPPMAN, Olufemi Adewole, stated.
In response to the claims by marketers, the Group General
Manager, Group Public Affairs Division, NNPC, Ndu Ughamadu, told
our correspondent on Sunday in Abuja that the government had made
it clear that there was no plan to increase petrol price.
He further noted that the oil marketers should channel their
case to the Petroleum Products Pricing Regulatory Agency, adding
that the NNPC could not sell petrol at a loss, as it bought the
commodity at N116.28 per litre through its Direct Sale Direct
Purchase scheme.
Ughamadu said, “We have since cleared the air that there is no
change in the pump price (of petrol) until the government has
provided alternatives to the citizens. On DAPPMAN, they should
refer their case to PPPRA who is the pricing regulator.
“As for NNPC, we buy the product at 116.28/litre from the
Federation through the crude for products exchange programme or
DSDP. We cannot sell at a loss. They should integrate like the
majors (major oil marketers) to sell at retail outlets where there
is a N6 retailers’ margin built therein instead of just stoping at
depots.”
But sources at the PPPRA stated that the NNPC was the sole
importer of PMS into Nigeria and had not been carrying the
petroleum products pricing regulator along with respect to its
(NNPC) activities when making imports.
“NNPC is the 100 per cent importer of PMS in Nigeria at the
moment, but when it comes to the issue of price adjustment they
will push it to the PPPRA,” a source, who pleaded not to be named
due to the sensitive nature of the matter, told our correspondent
in Abuja on Sunday.
The source added, “The PPPRA as the pricing regulator is meant
to know who brings in what, the amount of product, allocation, etc,
but unfortunately the agency is not carried along. The truth is
that it is when they (NNPC) have done all their transactions that
they forward the papers to PPPRA to sign.
“They claim that what they do is in the national interest.
Nobody gives them allocation on what to import. In those days,
there was always a quarterly meeting of stakeholders that includes
private petroleum product importers, but that meeting for some time
now has not held.”
DAPPMAN had argued that the government through NNPC refused to
adjust the pump price of PMS despite increasing the prices which
depot owners paid for the product.
Adewole said, “When we were buying it from them at N111 per
litre, the pump price of PMS was N145 for a litre and when they
increased it to N117, they still maintained that the pump price
should be N145. Now, who bears that difference between N111 and
N117?
“I want you to know that the number of marketers operating in
the downstream sector has been decreasing annually since 2016. I’m
not talking about people who just have offices, rather I mean
petroleum product marketers who bring in or buy products and sell.
This is why the sector should be deregulated.”
On whether marketers would vacate the petroleum product business
should the government fail to deregulate the sector, the DAPPMAN
executive said, “If I say 100 marketers were operating last year
and now it is only 10 that are operating, for the remaining 90
where have they gone to?”
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