A Review of the Nigerian Energy Industry

NNPC, major marketers on collision course over supply of petrol to Abuja

22 July 2015, Lagos – The apparent failure of the Major Oil Marketers Association of Nigeria (MOMAN) to supply sufficient petrol to Abuja despite alleged adequate product allocation from the Nigerian National Petroleum Corporation (NNPC) has set the corporation and the marketers on a collision course.

IPMAN-fuel pumpIn a bid to sanitise the fuel distribution and supply system across some cities, the NNPC has warned that henceforth any marketer found to be involved in product diversion would have its Bulk Purchase Agreement revoked.

This is coming as the Pipelines and Products Marketing Company Limited (PPMC), a subsidiary of the corporation, revoked the lifting licence (Bulk Purchase Agreement) of three independent marketers for engaging in products diversion and sundry infractions.

THISDAY gathered that while the PPMC had extracted a commitment from the major marketers that each of them would dispatch between 15 and 20 trucks from Apapa in Lagos to Abuja daily, actual load-out from the marketers to Abuja has remained allegedly low, according to the PPMC.

The marketers have however, refuted claims by the PPMC that it has given them enough product allocation to flood Abuja with petrol, saying  the PPMC lacks daughter vessels to bring product from the mother vessels at the high seas to the major marketers’ depots at Apapa.
MOMAN comprises Conoil, Forte Oil, Mobil Oil, MRS, NIPCO Plc, Oando and Total Nigeria Plc.

In a letter dated July 8, 2015, which was addressed to the Executive Secretary of MOMAN, Mr. Obafemi Olawore, the Managing Director of PPMC, Mr. Haruna Momoh, reminded the marketers of their earlier discussions on the need to maintain consistent supply to Abuja “to avoid gridlock, security risks and other problems associated with product scarcity in the Federal Capital, Territory (FCT).”

The letter with Reference No. PPMC/CSD/ED/45B, which was obtained by THISDAY and signed by one Amego FE, on behalf of Momoh, also reminded Olawore of his commitment to ensure that each of the seven marketers loads out between 15 and 20 trucks to Abuja daily.

“We wish to observe that the major marketers load-out to Abuja has remained very low from NNPC discharges to their facilities at Apapa. Available records on daily truck load-out shows more concentration on other areas with little consideration for the federal capital. This fluctuation in products’ deliveries to Abuja by the major marketers is worrisome, despite having strategic and highest numbers of retail outlets in Abuja,” Momoh said.

The PPMC boss also requested Olawore to impress on the major marketers the need to improve and maintain steady product supply to Abuja on daily basis.

“Additional volumes may be loaded from NNPC depots and throughput depots (Capital Oil and Folawiyo in Lagos, Matrix Energy at Warri and Blacklight Oil at Oghara),” Momoh added.

But in a swift response, Olawore in a letter dated July 15, 2015, told Momoh that the marketers did not have sufficient petrol at Apapa during the period cited by the PPMC boss.

To support his claims that the major marketers received insufficient allocation from the PPMC in the month of June, Olawore also released the individual truck-out of each of the marketers to Abuja during the period.

According to the report, Mobil loaded out 106 trucks of petrol to Abuja; Conoil (15 trucks), MRS (164 trucks), Oando (250 trucks), NIPCO (228 trucks), Total (191 trucks) and Forte Oil (104 trucks).

According to Olawore, between June 10 and June 16, three major marketers were totally out -of- stock, while the three others had only few days stock.

He reminded the PPMC boss that the marketers had earlier suggested that two vessels be dedicated to them using Bulk Oil Petroleum (BOP) jetty and four vessels for Petroleum Wharf (PWA) jetty.

“Our investigation showed that you either lacked vessels to do STS (Ship-to-ship) transfer or there was inclement weather on the high seas, thus frequency of vessel visits to Apapa was affected. We did not get priority loading in Oghara and Warri and this left our trucks waiting and idle. The same situation applied at Capital and Folawiyo,” Olawore said.

In order to flood Lagos and Abuja with petrol, Olawore suggested that the PPMC should dedicate PWA and BOP with four vessels, which must be dedicated to only the major marketers.

The MOMAN scribe also stated that Folawiyo should be dedicated to the major marketers only, while three vessels must be provided weekly.
According to him, the measure will ensure that at least 30 per cent of the product is dedicated to Abuja.

Olawore also described the current PPMC ticketing as very ineffective and suggested that porgramming should be done by the major marketers.

“Finally, another facility in the east belonging to any MOMAN member should be dedicated to only MOMAN liftings to Abuja and the North and this will ensure that at least 30 per cent are lifted through these locations,” Olawore added.

The spokesman of the NNPC, Mr. Ohi Alegbe, said in a statement yesterday that the persistent tightness of supply being experienced in the country despite huge load-outs from PPMC Depots by both major and independent marketers, was as a result of diversion.

According to him, PPMC has revoked the lifting licence (Bulk Purchase Agreement) of three independent marketers for engaging in products diversion and sundry infractions.

Alegbe identified the affected marketers to include  Funo Alfa, Organizer West Africa  and Rich Oil, adding that the sanction is with immediate effect.

He warned marketers to desist from products diversion, hoarding, and any other form of sharp practices as it would not hesitate to wield the big stick against any marketer found wanting.

The statement added that it was closely monitoring the market, stressing that the withdrawal of lifting licences of erring marketers is a continuous exercise.

However, while the NNPC has accused the marketers of diverting product, the marketers have insisted  that the problem was not about diversion but unavailability, which had led to high prices.

“Most depots in Lagos and Calabar, for instance, loaded for N94 per litre yesterday. For you to move the product from Calabar to Enugu or Kogi, you will incur an additional cost of N4 per litre on transportation, making it N98. So you cannot sell it at official pump price.

“The only way out is not to sell at Enugu metropolis to avoid DPR. You could instead sell it in filling stations along the Enugu-Onitsha or Enugu-Makurdi expressways or anywhere inside the hinterlands.

“The same thing happens to petrol meant for Lagos and Abuja. That is why you don’t find petrol inside the cities. The product that is supposed to be sold inside Lagos is being sold along the Lagos-Ibadan expressway, while Abuja-Suleja roads are flooded with petrol but there is none in the cities,” one of the marketers had earlier told THISDAY.

The marketers said the allegation of diversion was meant to distract attention from the inability of NNPC to bridge the gap in supply arising from the refusal of private marketers to import due to unpaid subsidy claims.


– This Day

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