26 December 2017, Sweetcrude, Lagos — The Depot and Petroleum Products Marketers Association, DAPPMA, has debunked an allegation blaming its members for hoarding petroleum products which had resulted in scarcity across the country.
In a statement by its Secretary, Olufemi A. Adewole, the group said while it empathises with all Nigerians at this time, adding, however, that the Nigerian National Petroleum Corporation, NNPC should be blamed since it has been the sole importer of Petroleum Motor Spirit, PMS since October 2017.
“We empathize with Nigerians who are going through difficulties at this time, spending hours on fuel queues because of the current fuel scarcity due to no fault of yours”.
Historically, DAPPMA members imported about 65% of the nation’s total fuel consumption. Major Oil Marketers Association of Nigeria, MOMAN imports about 15% while the Petroleum Products Marketing Company/NNPC imports the balance of 20%.
However, the scenario changed drastically due to several challenges faced by marketers.
“Sadly, some people have blamed marketers for hoarding products, unfortunately, this is so far from the truth”.
“Hoarding is regarded as economic sabotage and we assure all Nigerians that our members are not involved in such illicit acts”, the statement read.
The group said while all kinds of allegations have been made in the media, NNPC should be blamed.
According to DAPPMA, while it is common knowledge that Nigeria runs a fixed price regime of N145 per litre for PMS or petrol without any recourse to subsidy claims, however, the group also does not have control over the international price of crude oil.
Current import price of petrol is about N170/ltr, NNPC, which absorbs the attendant subsidy on behalf of the Federal Government, is the importer of last resort.
“We understand that NNPC meets this demand largely through its DSDP framework; however, due to price challenges on the DSDP platform, some participants in the scheme failed to meet their supply quota of refined petroleum products, especially PMS, to NNPC. This is the main reason for this scarcity”.
The International price of PMS went up during the hurricane Katrina and has not dropped below USD$600/MT.
The group also disclosed that interest rates charged by banks have risen above 25 percent.
“Exchange rate of USD to the Naira is N306 for PMS imports and also interest rate our banks charge is above 25%”.
“Landing cost of PMS in Nigeria is above N145/ltr which means any of our members that imports would have to resort to subsidy claims, a policy already jettisoned by the Federal Government”.
It also faults NNPC’s distribution channels.
“It is on record that any time NNPC assumes the role of the sole importer, there are issues of distribution because it is marketers who own 80% of the functional receptive facilities and retail outlets in Nigeria”.
The group said while it could not confirm or dispute NNPC’s claim of having sufficient product stock, it can confirm that its members do not have the products and as such, cannot distribute.
“If the products are offshore, then surely, it cannot be considered to be available to Nigerians”.
NNPC imports and distributes to DAPPMA, Major Oil Marketers Association of Nigeria, MOMAN and Independent Petroleum Marketers Association of Nigeria, IPMAN.
“Our members pay PPMC/NNPC in advance for petroleum products and fully paid up PMS orders that have neither been programmed nor loaded is in excess of 500,000MT (about 800,000,000 litres) as at today and enough to meet the nation’s needs for 19 days at a daily estimated consumption of 35,000,000 litres”.
“Our members’ depots are presently empty! However if PPMC/NNPC can provide us with PMS, we are ready to do 24 hours loading/truck-out to alleviate the sufferings of Nigerians until these fuel queues are totally eliminated”.
“Fuel marketers remain committed to the progress of the nation and its citizenry as therein lies our own profitability and fulfillment”.