Real Reasons Behind Nigeria’s Unending Fuel Scarcity

The lingering scarcity of Premium Motor Spirit (PMS), otherwise called petrol, has persisted in the Federal Capital Territory (FCT) and other hinterland states despite…

The lingering scarcity of Premium Motor Spirit (PMS), otherwise called petrol, has persisted in the Federal Capital Territory (FCT) and other hinterland states despite the receded floodwater in Lokoja, the Kogi State capital, which was initially blamed for the scarcity.

The situation has lasted for more than 30 days in the country’s capital city, Abuja, and in some cities majorly in the North.

Although the federal government had attributed the scarcity to flooding, which cut off fuel transporters and other commuters on the Lokoja highway, indications have also emerged that there are other factors responsible for the lingering situation.

Starting from the first week of October, commuters in Abuja got the indication of a looming petrol scarcity as various retail outlets gradually ran out of the product, while some that had it began an upward price adjustment.

Soon, black marketers resurfaced in the streets of Abuja, selling at N250 per litre initially before it rose to N350 at the prevailing rate. At the initial period, some marketers told Daily Trust on Sunday that there was a drop in loading at the depots, mostly located in Lagos and Warri in Delta State, among other coastal areas.

The troubles of fuel consumers worsened as they began to queue for hours to get the product. The fuel scarcity soon spread to more states in the hinterland.

The national vice president of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Alhaji Abubakar Maigandi, said product supply from the Nigerian National Petroleum Company (NNPC) Ltd to the private depots was limited.

“There is a little scarcity in the depots where we are loading. They have even increased their rates. Now, they are selling for N170 to N175/litre instead of N148/litre,” he noted.

In spite of assurances from relevant authorities, the situation deteriorated in mid October with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) formally confirming the petrol scarcity in Abuja and other states in the North, which it said was caused by the flooding in Lokoja.
In a statement, the NMDPRA noted, “Flood has submerged a greater part of the city and grounded all vehicular movements. This has affected the distribution of petroleum products to the Federal Capital Territory and environs.”

The agency said trucking via alternative routes was ongoing as part of measures to mitigate the situation. However, on its part, the NNPC Ltd said it had 30 day products’ sufficiency.

“The current queue situation in some parts of Abuja and its environs is as a result of delays in arrival of fuel trucks. This is happening as a result of heavy flooding that has submerged parts of the highway passing through Lokoja, Kogi State and also an incidence of a failed road section around Badegi-Agaie highway in Niger State.

“Consequently, vehicles, especially fuel tankers, are finding alternative roads to get to their intended destinations,” it stated.

As the water receded in Lokoja, access was gradually restored, but a massive gridlock began, with trucks spending nearly a day to cross a section of less than 500 meters at the Koton Karfe axis, near the Lokoja bridge.

The fuel queue continued across Abuja and states with prices reaching over N250/l at retail stations.
Some tanker drivers also blamed the persistent gridlock in Lokoja.

“The situation has not ended, but more tankers are plying the route from Lagos. Tankers spend over eight hours to pass through Koton Karfe, where the river overflowed,” Musa Garba, a tanker driver said in mid-October.

Also speaking, an official of the IPMAN, northern region, Mohammed Iliyasu, said it could take two weeks from that time for normalcy to return in retailing petroleum products.

Gabriel Fawole, a buyer, said he got the product around the boundary between the FCT and Nasarawa State at N220/l.

How N70bn debt, depot price hike fuelled scarcity
A key that has triggered petrol scarcity recently was the strike action of marketers over an alleged N70billion debt in bridging claims from the NMDPRA. For nearly two days, tankers with the product were grounded across the North over the claims, ranging between N50bn and N70bn.

The Suleja branch chairman of the IPMAN, Alhaji Yahaya Alhassan, at the NNPC Suleja depot, had announced the grounding of tankers as the NMDPRA had not paid the claims, an allowance to marketers for  transporting petrol from coastal areas to the hinterlands since January 2022.

He said nine states in the North with NNPC depots, namely Borno, Adamawa, Kano, Kaduna, Benue, Plateau, Gombe, Niger and Zamfara, were affected.

“We have about N50.6bn debt, and because of that we are withdrawing our services,” he said. The Borno chapter of the IPMAN said the claims had reached N70bn.

“For years, we have been following and lobbying the management of the NMDPRA regarding our unsettled bridging claims, amounting to N70bn to no avail,” the chapter’s spokesman, Abdulkadir Mustapha said.

In Kano, the chairman of the Northern Independent Petroleum Marketers Forum (NIPMF), Alhaji Maikifi said, “The major threat to our business is government’s inability to pay our transportation claims, amounting to billions of naira.”

More troubles at deports
Daily Trust on Sunday reports that October ended with petrol scarcity and long queues spreading to Lagos and increased in Abuja and Kano, even as marketers blamed fresh depot price hike.
One of the marketers, who spoke on the fresh scarcity, Mr Mike Osatuyi, said there was unsteady supply of petrol from the NNPC Ltd, the sole importer of the product.

Osatuyi, who is also the national operations controller of the IPMAN, said the situation had caused depot prices to rise from N165 per litre to N177 and N178 in Apapa and its environs.
“Marketers will only sell what they buy. If the price of petrol increases, we add our transportation costs and other charges to the selling price,” he said.

In Kano, motorists also groan over the cost of fuel, which has skyrocketed to N250 per litre across available filling stations open for service.

Shuaibu Adamu, a motorist, lamented how filling stations valued black market operators more than those who want some few litres.

Nura Malo, a black market petrol seller in Kano denied any wrongdoing by selling at N350/litre to motorists.

Chairman of the NIPMF, Maikifi, also blamed bad roads, apart from the depot price hike. He said the bad roads had slowed down trucks and increased repair cost, which is factored into the retail price.
‘We asked depots to increase supply’

Reacting to this, the Chief Executive Officer of the NMDPRA, Farouk Ahmed, an engineer, said in Lagos that the authorities had urged depots to increase supply.

He said, “I spoke with the executive secretary of the Major Oil Marketers Association of Nigeria (MOMAN) and he told me they had sufficient stock. I have directed them to start evacuating the product immediately to filling stations. The NNPC has also confirmed sufficiency and they have commenced evacuation.”

Marketers differ
However, a week after the efforts of the authorities to address the product scarcity after the flood, the situation has not abated; and marketers said it could be worse. There are still visible queues across retail stations in Lagos, Abuja, Kano and other northern states, our reporters observed.

Motorists in Lagos said they bought petrol between N197 and N210/l across stations.
Our correspondent observed Manbally Petroleum (formally Oando), behind Sterling Bank, Oshodi, selling at N210 at the weekend.

There were long queues in some fuel stations during the morning rush hours, but they eased off gradually from around 2pm.
A motorist interviewed in one of the stations, who gave his name as Wasiu, decried the “unfair practice” of hiking the price by marketers.

It was also observed that General Petroleum, also at Oshodi, sold at N200 with less queue.
A motorist who identified himself as Ebuka said he bought five litres of petrol and was asked to part with a fee for buying in a container.

Also, Rainoil at Furniture Bus Stop sold at N200/l, while Meritain station at Ogunoloko Bus Stop, along Mafoluku, sold at N195/l. Total Energy on the Toyin/Opebi Road at Ikeja sold at N170/l, being the official rate.

In the FCT, there were stations selling from N180 to N210 around the satellite towns like Kubwa, Lugbe, Nyanya and Bwari. In Abuja city, the price remains at N175 but with some stations shut, while few others operating have queues.

While Total, opposite NNPC Towers was shut, Conoil next to it operated with queues. AA Rano and NIPCO in Jabi operated, but Shema and AA Rano along Katampe were shut on Friday.

According to the IPMAN, the queues might not disappear anytime soon unless the authorities intervene. The chairman of the association, Lagos depot, Akinrinade Akinade, to Daily Trust on Sunday that, “The situation is still the same. We are still battling with stock”.

Akinade said independent marketers were at the mercy of depot owners, who arbitrarily increase ex-depot price, which is now about N190.

He said, “What is happening is simple economics. When the demand is more than supply, what do you expect? The price hike is even getting worse. At the depots now they are selling at N185 to N190.”
He called on the NNPC Limited, the sole importer of petrol, to bring in more of the product.

“In the short term, they should bring in more fuel, and in the long term, let them repair our refineries so that we can refine in-house rather than depend on importation. If four of our refineries were working we won’t be in this mess. That is the long-term solution to it,” he said.

The IPMAN official claimed that NNPC was only supplying major marketers in the urban centres without reaching the interior.

He added, “In the interior where our members mainly operate, they are selling above N200 because of the price we buy at the depots.”

Another marketer, who pleaded anonymity, said “There is a shortfall in supply from the NNPC. For this reason, most depot owners restrict supply to stations of their own brand.

“If, and where they sell to retailers outside their brand, they ensure full recovery of their costs, which include the vessel charter, fees by the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Ports Authority (NPA), denoted in US dollars, which depot owners presently source between N830 and 850 to US$1 as against N385 to US$1 on the PMS pricing template.”

But in a contrasting view, the executive secretary of the MOMAN, Clement Isong, said naturally the push for the product to reach the cutoff areas resulted in high demand, insisting that there is enough product.
Mr Isong told our correspondent over the telephone that MOMAN members were working with the NNPC Ltd to push out more volume of petrol.

He noted that the flood added to the scarcity, especially in some parts of the North.
“Trucks conveying petroleum products to the North could not access that area because of flood. They got trapped. This put constraints on the logistics chain.

“When the flood subsided, the truck started carrying products to those areas; and what happened was that people started filling up their empty tanks, which also created supply pressure in the South.
“It takes about one week or more for a tanker to travel from the South to the North. We have enough product, so normalcy will return in a few weeks as vessels carrying fuel are around,” Isong noted.
Nigeria has 29 days of petrol supply, as 7 ships arrive

The Chief Corporate Communications Officer of the NNPC Ltd, Garba Deen Mohammed, was yet to respond to our enquiries on petrol availability at the depots.

However, daily PMS stock data for November 2 indicated that there is product sufficiency for 29.18 days at an average of 60 million litres petrol consumption per day.

Nigeria has 1.807billion litres of petrol for the period. Out of this, the volume on ground can last for just 10.8 days, while about 18.39 days’ supply (imported) has arrived at the ports but yet to be distributed.
Analysis shows that the marine stock (in arriving vessels) is 1.103bn litres, while the land stock (already across outlets) is 647.844 million litres.

The depots, which used to have high volume, now have 56.607m litres of petrol. However, that could increase as soon as the marine stock is offloaded, according to the PMS stock data trend.
More so, according to NPA’s shipping position report for Friday, seven petrol-laden tankers have berthed across six ports in Nigeria between Monday and Friday.

At the Apapa port, one vessel arrived on Thursday with PMS at the ASPM jetty, two others arrived at Bovas Petroleum and Emadeb jetties at Tincan Island port on Tuesday and discharged petrol imported on behalf of NNPC Ltd.

A ship bearing petrol for Dozzy Oil arrived in Calabar port on Tuesday, while two ships with petrol came to Warri port on Thursday and Friday for Pinnacle Oil. At Rivers Port in Port Harcourt, Stockgap took delivery of one vessel with petrol on Monday, and the ship is expected to be there until Wednesday.

Daily Trust