Hike in fuel price may worsen scarcity, IPMAN warns

The Independent Petroleum Marketers Association of Nigeria has raised the alarm over likely fuel scarcity despite the increasing costs of petroleum products.

The association said that there appears to be disagreement between members of the association and the management of the Nigeria National Petroleum Company Limited.

Speaking with journalists in Ilorin on Friday, the IPMAN National Public Relations Officer, Okanlawon Olanrewaju, said that the current price that the NNPC is imposing on marketers is too high and may cause another round of fuel scarcity.

The IPMAN spokesperson, who said that NNPC wants to sell at N1,010 to marketers, added that the price is even higher than what it sells at its outlets.

“The problem IPMAN is facing in the downstream oil sector is confounding. We realize that what NNPC is imposing on us is too much. NNPC is the sole off-taker from Dangote oil refinery and the amount the NNPCL wants to sell to us is too high.

“NNPC wants to sell at N1,010 to IPMAN. This price is even higher than what NNPC sells at their retail outlets after including transportation costs. That’s a very difficult situation they are putting us in. We may not be able to survive in that kind of situation because we’ll have to sell to the same members of the public. Definitely, it’s like they want to tag us as bad marketers”.

Okanlawon, who described the situation as unacceptable to marketers, said, “We don’t really know why they are doing that but definitely, we’ll not accept it. It won’t work.”

“Presently, our members have paid a lot of money about N15 billion into the NNPC account for months and they’ve not given us the product. This is for about two to three cargoes at the old price of N750 per litre. And now they want to increase the price after about three or four months.

“They’ve asked us to top up the money paid to them before we pick the product. And that’s what they have been doing always. We cannot continue doing that. Our president has instructed that every member of the IPMAN should stay put until further notice as we’ll be having our NEC meeting on Wednesday next week. It means that marketers will not pay that money until our discussion”, he said.

While lamenting the situation, the IPMAN spokesperson said that marketers take loans for business in banks, adding that the loans attract high interest rates.

“Economically, what they want us to do doesn’t sound well. Because we sourced the money from banks and we’re paying money on it. We all know the way interest rates are going up in banks. They also go to banks even with better negotiation powers than us individual marketers.

The IPMAN official, who agreed that the stay-off directive by the leadership of the association to marketers could lead to the non-availability of fuel in circulation, said that it is likely to disrupt the distribution of fuel, “because by the time we didn’t pick product for sometimes and we start exhausting what we have, definitely, there’s going to be scarcity”.

He was also against the call for a return to the fuel subsidy regime, saying that, “returning to the subsidy era will distort all the process already in place.

“Achievements have been made. There may be some hitches along the line, but it’s better we take these steps. It may be tough now. The step the government is taking is good. By the time we’re in full deregulation, it’s going to bring about real competition in the downstream oil sector which is good for the economy.

“NNPC should not be the sole off-taker of Dangote fuel. If it’s opened up, the price would be crashing down. We the IPMAN members are not finding it easy because we can’t plan our business,” Okanlawon said.