A Review of the Nigerian Energy Industry

Petrol shortage hits Lagos as supply drops

10 December 2014, Lagos – Petrol supply in Lagos worsened on Tuesday as long queues of vehicles resurfaced in a number of filling stations, disrupting the free flow of traffic on some roads.

Indication also emerged that loading activities at the Lagos depots dropped by over 80 per cent.

Fuel-queueBut the management of the Nigerian National Petroleum Corporation and its downstream subsidiary, the Pipelines and Products Marketing Company, said the country had over 32 days stock of petroleum products.

An executive member of the Petrol Tanker Drivers arm of the Nigeria Union of Petroleum and Natural Gas Workers, who did not want his name disclosed because he was not authorised to speak on the issue, said about 200 trucks usually loaded petrol on a daily basis, but owing to recent developments, the number had dropped to less than 40 trucks.

He said this drop was responsible for the current scarcity being experienced in Lagos and some other places, and the situation could worsen if nothing was done to check it.

Giving an update on activities at the Apapa depot in Lagos on Tuesday, the Chairman, Nigeria Union of Petroleum and Natural Gas Workers, Lagos Zone, Alhaji Tokunbo Korodo, also said stock of petrol had gone down drastically, and crisis loomed in the market unless there was an immediate intervention.

On the possibility of oil marketers hoarding the product, he said, “That is not possible. The situation is bad, and that is the reason why we are experiencing scarcity. This is not about product hoarding.”

The NNPC, in a statement, said the noticeable queues in some filling stations in Lagos were attributable to panic buying caused by the reduced movement of trucks from oil marketing companies’ depots in the Apapa area of Lagos due to the gridlock created by the ongoing road construction in the vicinity.

The corporation urged marketers affected by the Apapa road construction to load their petroleum products from its inland depot in Mosimi so as to support the “zero tolerance to fuel queues” policy across the country.

It appealed to marketers to immediately commence loading from the PPMC Mosimi depot to cover for the shortfall from Apapa.

The corporation also advised marketers to desist from hoarding or diversion of petroleum products as any marketer caught in the nefarious act would be sanctioned.

Meanwhile, high subsidy payments, devaluation of the naira and low capacity utilisation of the country’s refineries have been identified as factors denying Nigerians a reduction in the pump price of petrol amid falling global oil prices.

A visit by our correspondent revealed lack of activity in some stations in several parts of the state. For instance, at Oando and Conoil filling stations at Obalende in the afternoon, attendants said they were not selling because they had exhausted the products they had and were awaiting tankers to bring products.

Many of the stations along the Obafemi Awolowo Road, Ikoyi were also not selling. Along the Lagos-Ibadan Expressway, a number of the stations were not operating while some had long queues of motorists to attend to.

The Executive Secretary, Major Oil Marketers Association of Nigeria, Mr. Obafemi Olawore, in a telephone interview with our correspondent, attributed the long queues and lack of products at filling stations to “normal operational delays at the jetties.”

It was said in some quarters that the proposed national strike by the Petroleum and Natural Gas Senior Staff Association of Nigeria might have further compounded the situation as some stations were said to be hoarding the products.

“There were delays at the jetties, but the delays have been resolved. If it continues till next week, then we can look at other areas. There were delays at Apapa jetties, where major marketers such as NIPCO, Aiteo and Honeywell pick products from, and because of the delay, we could not supply most of the stations. These companies were completely dry, but they are being given something right now,” said Olawore.

Meanwhile, the amount of subsidy being spent by government on premium motor spirit otherwise known as petrol has dropped by more than 70 per cent amid the falling oil prices in the last one month.

Approved prices for premium motor spirit otherwise known as petrol as of December 8, 2014 shows a reduction of the landing cost of the product to N98.15 per litre from N127.57 on November 3, according to data from the Petroleum Products Pricing Regulatory Agency.

The expected open price market price and subsidy as of December 8 were put at N107.41 and N10.41 respectively, as against N141.94 and N44.94 on November 3. The regulated price of the product is N97 per litre.

An energy specialist at Ecobank, Mr. Dolapo Oni, who noted that falling oil prices impact directly on the landing costs of petrol in Nigeria, highlighted the real reason Nigerians had not seen any impact of lower oil prices on the pump price of petrol.

“Nigeria already has the lowest pump price for petrol in sub-Saharan Africa at $0.52/litre (at current exchange rates). This is due to the high amount of subsidy paid by the government on fuel. Compared to our fellow SSA countries who pay an average of $1.20 per litre, we are a bit far from the point where the lower oil prices would start to benefit us,” he said.

In this article

Join the Conversation