Collapse of govt depots responsible for fuel queues

08 December 2015, Abuja – The collapse of government owned petroleum depots across the country has been cited as the major reason behind the takeover of the federal highways by petroleum trucks.

Austin Avuru 1Speaking at the 10th PETAN Annual Oil and Industry Awards & Dinner in Lagos, the Managing Director, Seplat Petroleum Development Company, Mr Austin Avuru, argued that only the urgent repairs of the 19 depots will arrest the situation.

According to him, “Enugu depot have not received product for the last 10 years, so we import all our products to Apapa, and all the tankers around the country have to travel to Apapa to pick products.

“If your tanker picks 33,000 litres from Lagos to Enugu, the bridging fee that you receive is higher than the value of the product you are picking from Apapa to Enugu. Products are supposed to be picked from the nearest depot, Markurdi, Ilorin, Kaduna, Gombe; they don’t exist that is why all of them are in Lagos. As long as the depots don’t work, it doesn’t matter how mighty Lagos State Government is, he won’t rid Lagos of those tankers.

“Products distribution is in shambles, leading to scarcity, the National Assembly approved a supplementary budget of N500 billion higher than the actual capital spent for the whole year just for the purpose of paying arrears for subsidy.”

Against this backdrop, he declared: “The downstream is completely collapsed, every time the Lagos State Government attempts to move the terminals away from Apapa, what they don’t realise is that the real problem is in the collapse of our 19 depots built around the country for the purpose of delivering petroleum product within three hours drive to the station.”

Oil production: Avuru also blamed the drop in traditional fields oil production on “the huge funding gap that have crept into JV operations, most JV operators have moved to deep water to provide additional one million barrels per day and that has made it difficult for us to realise that we have actually being seeing consistent decline of production over the past 10 years since 2005.

“Nigeria is a huge gas basin sitting on a ream of oil, and we have so much gas to prove it, but in the past three years since the power sector reform, domestic gas demand has jumped from 300Mscft a day to about a billion per day BCF. We estimated that the amount will be about 3BCF a day by next two years at the end of 2017, all of a sudden we are now actually looking for gas.



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