A Review of the Nigerian Energy Industry

‘Absence of middlemen good for kerosene market’

23 September 2015, Abuja – A petroleum products dealer and operator of the Nipco Filling Station, Fadeyi, Lagos State, Mr. Kayode Adepoju, has said eliminating middlemen in the kerosene supply value chain is the best thing that can happen to the market.

Kerosene-queue-at-an-NNPC-filling-station-300x199tHe said the activities of middlemen, who used to issue pro-forma invoices to marketers before now, were the reasons for the high price of the product.

Adepoju said this in Lagos on Tuesday when his filling Station commenced the sale of kerosene to consumers at N50 per litre.

Adepoju, who has been a dealer with Nipco for three years and has over 20 years’ experience in the oil sector, said, “We are using the station as a pilot to know how the crowd will be controlled and the overall reaction from the people.

“All Nipco filling stations should be selling kerosene at N50 per litre going forward.”

He said before now, the major oil marketers could not sell kerosene at their stations because they could not cope with the N50 official price fixed by government.

“There were stopgaps at the refineries as the marketers were forced to bribe government officials to get the product. After bribing, the landing cost gets to N90 per litre,” Adepoju explained.

He said the President Muhammadu Buhari administration had introduced an initiative that allowed the Federal Government to sell kerosene to the marketers on credit for about 10 days so that middlemen in the value chain could be eliminated.

Adepoju added, “The middlemen handle issues like the pro-forma invoices. The condition for one to get the PFI is that you have to get a depot, and if you parley with government agencies, you get the PFI, which is the allocation one has to bring in kerosene through vessels to the depots.

“Even if the government’s price for kerosene is about N20, with the bribes given to government officials, the product does not land at N50 per litre, but at N90 plus. That is why it is not really attractive to sell at N50. But now, with Buhari’s initiative, the product can be sold for N50 per litre.

According to him, pump integrity and selling at the government-regulated price have been the company’s strength.

  • Punch
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