A Review of the Nigerian Energy Industry

Okupe decries marketers’ unilateral increase of petrol price

31 October 2012, Sweetcrude, ABUJA — THE Nigerian government has decried the increase in the pump price of petrol in many fuel stations across the country, warning that owners of such petrol stations found to be selling above the normal pump price of N97 per litre would be tagged saboteurs and such station will be sealed.

Senior Special Assistant to the President on Public Affairs, Dr Doyin Okupe, said in an interview that government was doing everything to check the trend.

He was reacting to the sale of petrol in many filling stations above the official price of N97 per litre.

According to Okupe, “the official price is N97. Any one who sells above that is a sabotoeur. The Federal Government will continue to seal off outlets where such happens. Very soon the Federal Government will clamp down on those who hoard.

“We also appeal to those hiking prices and hoarding to stop. It is wrong and the interest of the masses should be considered. The Federal Government is doing everything to stop the trend. Nigerians are assured there is no hike in pump price any where.”

Explaining why some marketers sell above the official price, chairman of the Independent Petroleum Marketers Association of Nigeria, IPMAN, Delta State, Mr. Akpoviri Edafevwotu, who said: “We sell at government approved price of N97, but the problem at the moment is unavailability of the product.

“Sometimes, people buy from owners of private depots and the landing price is N110. By the time you put together all the logistics expended and under such a situation, it is difficult to sell below what you purchased.”

Edafevwotu, however, said filling stations that get supply at official price normally sell at N97, adding that in PPMC, they might programme that they would load 50 trucks, but at the end of the day, only five to six trucks are loaded and the scarcity remains.

The Delta IPMAN boss explained that on the average, an independent marketer spends about N3 million to buy a truck of fuel with a profit margin of between N5-N6 per litre allowed by the NNPC. ”

He said: “His total profit on a truck of petrol is about N180,000 and he sells at N97 per liter because he bought at the official price, but when the petrol is sourced outside PPMC at higher price, it becomes difficult.

“That is where the problem is. If you go to some private depot owners, I do not want to mention names, but whatever names I mention is verifiable, they sell at N100 per litre to independent marketers. Therefore, an independent marketer cannot buy at that price and sell at N97 after incurring other expenses. He then appealed to the government to ensure that more refineries come on stream to meet the demand for petrol in the country.

Managing Director/Chief Executive Officer of Matrix Energy, Warri, Mr. Abdulkabir Adisa Aliu, denied the allegation that, as a depot owner, his company was selling above N100 to independent marketers. His words, “We have not sold above government price to any person”.

He, however, made a disturbing revelation when he said: “Matrix has not sold petrol since August. That was the last time we got product from PPMC.”

“You can imagine what it means if a major depot owners got supply last in August.”

Mr. Aliu said: “We sold our last product at N87 and the last time we imported petrol into the country was in May. We have stopped importation for now and the same goes for most other companies because of non-payment of subsidy for the ones we purchased previously.”

He said it was a known fact that there was no scarcity of petrol in the country in the years, 2010 and 2011, but the scarcity became outstanding this year because of the removal of subsidy, the corresponding strike by the union, which lasted until March.

The Matrix Energy boss said the Federal Government Technical Committee on Payment of Fuel Subsidies, led by Mr. Aigboje Aig-Imokhuede was subsequently set up in April, but even at that, companies, which imported fuel the previous months were still groaning under debts from loans taken from banks because they had not been paid.

He said it was uncertainty and huge debts that made most of the companies to cut down drastically on their fuel importation, adding, “If I borrowed N3 billion to import fuel and the banks are after me to pay N50 million interest monthly, you know what that means”.

With the huge demand of fuel in the country, he said he commended the present management of NNPC for being able to sustain the present level of supply.

He said, “At the moment, Matrix Energy Limited does not have petrol in its stock, so it is not even a question of selling above the recommended price. When we have, we sell at ex-depot price of N87. It is wrong for any person or company to buy at official price and sell above pump price of N97”.

“I do not see why government should pay subsidy to those who sell above official price”, he added.

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  • Okupe should have also decried the PPMC’s inability to supply PMS to marketers. If the last time a marketer got supply was August, we needn’t look to far to determine the reason for the scarcity.

  • Who are the marketers?. Who is GEJ trying to sell PHCN to?. This cabal is not done with nigeria and nigerians. And GEJ is their errand boy.