By Becky Usman
Nigeria is grappling with a renewed fuel scarcity as numerous oil marketers have shuttered their outlets, causing long queues at retail stations and price hikes. This predicament is a result of an unfavorable working environment and multiple challenges in the country’s fuel supply chain.
In Lagos, queues have formed at various retail outlets, including the Nigerian National Petroleum Company (NNPC) Limited’s retail outlet on King’s Way Road in Ikoyi. TotalEnergies at Eric Moore has closed its gates to motorists to manage congestion, and Saitara Petroleum and Gas in Orile Iganmu has suspended its operations. Tinpet Nigeria Limited, making an effort to continue serving customers, has raised its petrol pump price to N605 per liter as of 1:14 pm.
In Abuja, many marketers who remained open have increased their pump price from N615 to N625 per liter. In Delta state, Matrix Energy Limited announced a price increase to N598 per liter for petrol and N958 per liter for diesel.
Independent marketers attribute this situation to the challenges of importing fuel, despite the deregulation of the downstream sector, compounded by market instability, poor road conditions, and a shortage of foreign currency. The exchange rate for a dollar is trading at over N1,045 on the black market.
The Nigerian National Petroleum Company (NNPC) remains the primary fuel importer, but its affordability poses difficulties for other marketers. Abdulkadir Mustapha, the spokesperson for the Independent Petroleum Marketers Association of Nigeria (IPMAN) in Borno state, highlighted that private depots are out of stock because they rely on NNPC for supplies, creating opportunities for profiteering.
He further noted that NNPC’s supply chain has faced disruptions, as some of its portals have closed and are no longer issuing authorization to marketers. Despite deregulation, NNPC remains the sole importer of Premium Motor Spirit (PMS or petrol).
Explaining the challenges in fuel distribution, Mustapha stated that the cost of fueling a diesel truck to transport products from the depot of origin, such as from Lagos to Maiduguri or Warri to Calabar to Maiduguri, has risen to N2 million. This results in a transportation cost of not less than N65 per liter for petrol to the northern regions, with an overall cost per liter reaching N657, leaving little room for profit.
The situation highlights the need for a comprehensive review of Nigeria’s fuel supply chain and regulatory framework to ensure stable and affordable fuel availability for the country’s citizens.