Headlines

Dangote drops diesel to N940, stations sell N1,400

Published

2 weeks ago

24 April 2024

Dangote drops diesel to N940, stations sell N1,400

Oil marketers have continued to dispense Automotive Gas Oil, popularly called diesel, at a price between N1,350/litre and N1,450/litre in various locations across the country despite repeated cuts in the price of the commodity by the Dangote Petroleum Refinery.

Although they attributed the high pump price of AGO to transportation costs, taxes and old stock in most of the tanks in their filling stations, they commended Dangote for yielding to their calls for further reduction in the price of AGO from the plant.

This also followed about N470/litre slash in the price of aviation fuel, popularly called JetA, by Dangote refinery.

Dangote crashes prices

The Dangote Petroleum Refinery, on Tuesday, announced a further reduction in the prices of diesel and aviation fuel to N940/litre and N980/litre respectively.

On April 17, The PUNCH reported that Dangote refinery listened to the calls of oil marketers regarding a reduction in the price of diesel, as the refinery reduced the cost of the commodity from N1,200/litre to N1,000/litre.

On Tuesday, the multi-billion dollar facility announced a further reduction in the price of AGO but noted that this change was only applicable to dealers purchasing up to five million litres of diesel and above.

“The price change of N940 applies to customers buying five million litres and above from the refinery, while the price of N970 is for customers buying one million litres and above,” the firm stated in a statement issued by its spokesperson, Anthony Chiejina.

He explained that the new price aligned with the company’s commitment to cushion the effect of the economic hardship in Nigeria.

“I can confirm to you that Dangote Petroleum Refinery has entered a strategic partnership with MRS oil and gas stations to ensure that consumers get to buy fuel at affordable prices in all their stations, be it Lagos or Maiduguri.

“You can buy as low as one litre of diesel at N1,050 and aviation fuel at N980 at all major airports where MRS operates,” Chiejina stated.

He further noted that the partnership would be extended to other major oil marketers.

“The essence of this is to ensure that retail buyers do not buy at exorbitant prices. The Dangote Group is committed to ensuring that Nigerians have better welfare and as such, we are happy to announce these new prices.

“We hope that it would go a long way to cushion the effect of economic challenges in the country,” the spokesperson of the refinery stated.

The management of Dangote Petroleum Refinery announced a reduction in the price of diesel from N1200 to N1,000/litre less than two weeks ago.

Tuesday’s price slash marked the third major reduction in diesel prices in less than three weeks. The product sold for N1,700/litre about a month ago, but was reduced to N1,200/litre by Dangote refinery.

The facility also carried out a further reduction in the cost of AGO to N1,000/litre, before the latest slash to N940/litre. It puts aviation fuel from the plant at N980/litre.

President Bola Tinubu had also commended the refinery for the initial price reduction, describing it as an enterprising feat.

Reacting to the latest development, the Director-General of the Manufacturers Association of Nigeria, Ajayi Kadiri, was quoted in the statement from Dangote refinery as saying, “The decision of Dangote refinery to first crash the price from about N1,750/litre to N1,200/litre, N1,000/litre and now N940/litre is an eloquent demonstration of the capacity of local industries to positively impact the fortunes of the national economy.

“The trickle-down effect of this singular intervention promises to change the dynamics in the energy cost equation of the country, in the midst of inadequate and rising cost of electricity.

“The reduction will have far-reaching effects in critical sectors like industrial operations, transportation, logistics, and agriculture, contributing to easing the high inflation rate in the country. A lot of companies will be back in operation.”

Oil marketers also commended the management of the refinery for reducing the price of diesel, but they continued dispensing the product at high prices and blamed this on various factors.

Marketers blame old stock

The National President, Independent Petroleum Marketers Association of Nigeria, Abubakar Maigandi, commended the Dangote refinery for the latest reduction in the price of diesel.

He, however, stated that this would not translate to an immediate reduction in the pump price of the product due to the presence of old stock at filling stations.

“Marketers are happy about the reduction in the price of diesel from the Dangote refinery but still we are appealing to him to further reduce the price. Let them try as much as possible to see how we can get it at N800/litre.

“However, we must state that he has tried and marketers are happy because of the reductions being carried out by Dangote refinery since they started releasing diesel into the domestic market.”

When asked to explain why marketers were still selling the commodity at between N1,350/litre and N1,450/litre depending on the area of purchase, the IPMAN president said it was because many dealers were still having the old and stock which they bought at N1,225/litre.

Maigandi said, “The price reduction by Dangote refinery will not reflect at the pumps immediately because he started selling at the rate of N1,225/litre. Many marketers bought at that price and are still selling that stock.

“So there is no way they can be able to reduce the price to below their cost price. But with time, the price of the product at the filling stations will reduce and normalise.

“Before now some stations were selling it at N1,600/litre, but now you can get it at N1,300/litre and N1,350/litre depending on the location and the distance from Lagos.”

On whether Dangote refinery had briefed marketers about when it would start pumping out Premium Motor Spirit, popularly called petrol into the market, Maigandi said, “We don’t know the time. But since he said he would start it, I know that he will do that. So we are still waiting.”

On his part, the Executive Secretary of the Major Energies Marketers Association of Nigeria, Clement Isong, said no marketer would buy diesel at N940 and sell at N950, considering the incurred costs in the business, describing diesel as a slow-moving product.

“Dangote sells its product at the loading rack at that price. The marketer has to borrow money to buy that product and hire a transporter to move that product to his filling station. To recover the cost of building, running his filling station, paying his staff and adding a margin to it to sell to the public, and diesel is a very slow-moving product. It is in your tank for several weeks without people buying and you are paying financial costs on it, all those costs are added.

“If he is delivering to you in your location, it is cheaper because you are not going to pay the storage cost or the maintenance cost. You just take it from Dangote, you need to finance it, pay the transport to deliver to your location. He drops it with you, and you pay.”

Isong added that an average marketer has several costs to recover, noting that “he has to make a margin on top to stay in business. So, he is not going to buy it at N940 and sell it at N950, it doesn’t work for him.

“As to what he sells it, this depends on how efficient he is. If it is a one-man business, its costs are lower than if it is a business that owns 200 stations or 300 stations or 500 stations.”

High diesel prices

Filling stations across different parts of Nigeria are selling diesel at an average rate of between N1,350/litre and N1,450/litre despite the price cut by Dangote refinery.

Checks by our correspondents on Tuesday showed that many filling stations were still dispensing diesel at N1,299, N1,350, N1,400 and N1,450/litre.

At Jismah filling station in Iperu area of Ogun State, an attendant, who did not want his name in print due to lack of authorisation to speak on the matter, told one of our correspondents that the pump price of diesel was N1,299/litre.

The commodity was sold at N1,400/litre at Heyden, a filling station owned by a prominent politician in Ogun State

In some fuel stations along the Igando-Isheri-Egbeda axis of Lagos State, it was observed that the product sold for N1,350/litre.

An outlet belonging to Mobil along Igando-Isheri Road in Alimosho Area of Lagos State sold the product for N1,350/litre.

A filling station of the Nigerian National Petroleum Company Limited along Egbeda-Idimu road also dispensed diesel at N1,350/litre on Tuesday.

However, most of the fuel stations along the axis were not selling the product as at the time of filling this report.

N1,600/litre in Enugu

In Enugu, the cost of diesel on Tuesday was between N1,350 and N1,500 in the state metropolis.

Checks by one of our correspondents revealed that those who had earlier reduced the price from N1,600 to N1,350 had tampered with their pumps.

However, it was observed that some stations were still dispensing the commodity at N1,600/litre in Enugu State on Tuesday.

At Romchi Oil and Gas, the station dispensed diesel at N1,450/litre. At North West, the station, diesel was N1,350/litre, while at Equity Filling Station it sold for N1,400/litre.

A tanker driver who identified himself as Ogbonna Orji, said “I have heard of the slash in diesel price but that is only in the newspapers. If you go to stations you will know that the said price slash is a mare political talk.

“Today I bought diesel in three filing stations and the prices remained the same. For any station selling below N1,600/litre, their meter has been tampered with. Because of lack of regulations, petroleum dealers now do anything and get away with it.”

In Ilorin, the Kwara State capital, diesel went for between N1,380 and N1,550/litre.

Total Energy, a major dealer, dispensed the product as N1,380/litre, while the NNPC station at Geri Alimi sold it at N1,450litre.

At Bovas filling stations at Odota, Sawmill and Taiwo road, diesel was sold at N1,550/litre, while Neemam and MKJ Oil on Murtala Mohammed road sold diesel at N1,500/litre on Tuesday.

A petrol attendant at the NNPC filling station who simply identified himself as Fatai, said the station was still selling its old stock that was delivered to the outlet about two weeks ago.

“We are selling the old stock of diesel which was delivered at the station two weeks ago. We still sell petrol at N580/litre but the new price of diesel has not been sent to us,” he said.

Filling stations in Kano dispensed diesel at between N1,350 and N1,450/litre.

It was, however, observed that many of the filling stations were not selling the product on Tuesday when one of our correspondents moved around the ancient city.

At the Aliko Oil and Gas filling station along Hotoro/Maiduguri road, they sold diesel at N1,350/litre

A customer who simply gave his name as Abdulkadir, said he had been buying the commodity at between N1,500 and N1,550/litre since the last two weeks.

According to him, it was three days ago that he started purchasing the product at N1,350/litre.

In Gombe, the cost of diesel was mostly N1,450/litre across most filling stations visited by one of our correspondents.

lbrahim Ruwa, who operates a water tank in the state capital, said the high diesel cost had increased his operating cost.

It was also observed that the N1,450/litre price was dependent on the station, as some marketers dispensed the product at N1,500 to N1,700/litre.

The price of diesel in most filling stations in Sokoto was between N1,350 and N1,400/litre on Tuesday.

N2,350/litre in Zamfara

A litre of diesel is about N2,350 in many filling stations visited by one of our correspondents in Gusau town, Zamfara.

Further checks showed that no filling station was selling diesel below N1,350/litre, while many others had closed down as they could not bring the commodity due to the fear that the price might come down.

Some of the stations visited include Raheem, A.A. Rano, Danmarna, Dinawa, and Asad.

Some filing stations in Benue State had no diesel to sell on Tuesday, while those dispensed the commodity sold it at between N1,500 and N1,350/litre on Tuesday.

Our correspondent who visited a few filing stations in Makurdi, observed that the product was sold above the old N1,200/litre rate.

At Normal Resources filing station at High Level, Makurdi, diesel was sold for N1,350/litre, while at Ikyabis filling station it was N1,500/litre.

Diesel was sold at between N1,280 and N1,450/litre in Asaba and its environs on Tuesday.

It was observed that some filling stations, especially those of major marketers such as Rain Oil, sold diesel at N1,280/litre. Other filling stations visited sold it at N1,450/litre.

Additional reports by Nathaniel Shaibu, Raphael Ede, Tunde Oyekola, Tukur Muntari, Chima Azubuike, Animasahun Salman, Maiharaji Altine, John Charles, and Makurdi Matthew

Headlines

NNPC, marketers in war of words over fuel scarcity

Published

2 days ago

4 May 2024

Agency News

NNPC, marketers in war of words over fuel scarcity

The Nigeria National Petroleum Corporation has blamed the lingering fuel scarcity in the country on panic buying and sharp practices by some petroleum marketers who are exploiting the present situation to make more money.

The company also vowed that the fuel queues across the country would end next week, noting that it had enough litres of fuel to end the scarcity.

Petroleum marketers, however, disagreed with the position of the NNPC, insisting that inadequate supply was a major reason for the persisting fuel scarcity.

Recall that on Tuesday, the NNPC spokesperson, Femi Soneye, assured that the ongoing shortage in supply of petroleum products and queues for the products would be cleared by May 1.

According to him, the company had more than 1.5 billion litres of petroleum products available, enough to last for at least 30 days. He added that some individuals might be exploiting the situation to maximise profit.

The Major Energies Marketers Association of Nigeria had in a statement said its members in Apapa and other locations in Lagos had received 300 million litres of fuel from eight vessels this week.

This was after the South-West Regional Coordinator of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Ayo Cardoso, also confirmed to The PUNCH that aside from the 240 million litres offloaded at various depots on Monday, close to 85 million litres of petrol was offloaded as of Tuesday evening.

Cardoso stated that the government was doing its best to ensure massive distribution of PMS, adding that the product would soon be available across the country.

According to him, each state of the federation had its allocations, saying the same will be delivered to reduce the queues at filling stations.

“As I said earlier, there will be enough fuel across Nigeria soon. We have received over 300 million litres as of Tuesday. More have arrived as we speak, but I can’t give you the figure. Vessels will keep arriving in Nigeria for 15 days, which started counting on Monday, and we will keep distributing the product across the nation.

“The masses should not panic; all these will soon vanish. We are not prioritising anywhere, each state has its allocation to be delivered accordingly,” Cardoso stated.

In the last few days, the queues and shortage of petroleum products worsened the living conditions of most Nigerians as they struggled to get the product.

Roads were deserted while some individuals parked their vehicles at various filling stations pending the availability of petrol.

Hoarding of the product had also been on the increase, as some took advantage of the situation.

Concerned, the House of Representatives Committee on Petroleum Resources (Downstream and Midstream) called on security agencies to pick up hoarders of PMS.

Speaking with Saturday PUNCH, the spokesperson of NNPC, Olufemi Soneye, explained that the oil firm currently had about three billion litres of petrol, as he blamed oil marketers and panic buying for the lingering queues.

“The queues are clearing. They won’t just clear like that, because people are trying to hoard, while others are buying what they don’t need. That is why we keep saying there is enough product; there is no need to buy what you don’t need.

“Also, you can’t exclude the marketers in this, as they want to use this opportunity to make more money. These are the issues, which is why we have involved the NMDPRA, because it is their duty to ensure that the right thing is done by these filling stations.

“Our job is to provide the product and we’ve told you that we have over 1.5 billion litres available. So, the NMDPRA should please do something about the distribution. It is not our job. We are not the regulator, and we don’t have power to sanction the filling stations that are not doing what they are supposed to do.”

Soneye said the NNPC had increased the volume of petrol in Nigeria and insisted that distribution by marketers was now the concern.

Stop blaming us for scarcity – Marketers to NNPC

Marketers under the aegis of the Independent Petroleum Marketers Association of Nigeria have, however, told the NNPC not to blame them for the queues in filling stations, saying they were not involved in sharp practices.

The National Vice President of IPMAN, Hammed Fashola, wondered how the NNPC could shift the blame to marketers, who were not the importers of petrol.

Fashola said marketers could only hoard an available product, recalling how IPMAN had assisted in clearing off the queues in filling stations.

“That is far from the truth. You can only divert the product that you have. You don’t divert what you don’t have.

“On the issue of pricing, we are in a regime of partial deregulation. If you noticed, even before this crisis, we had different prices everywhere. That is another issue that cannot stand.

“On the issue of hoarding, you cannot hoard what you don’t have. It is not even making sense when you have fuel at this critical period, then you say you want to hoard it. So, that is not true too,” he said.

Asked if the marketers were now getting the product from the NNPC, the IPMAN leader said, “Let me use this opportunity to commend the NNPC, despite the fact that they want to put the blame on us. I think they’re trying their best to put the situation under control”.

Fashola added that independent marketers did not engage in sharp practices.

“We have already set up a task force within the IPMAN to make sure our people play according to the rules and regulations. We are a very disciplined organisation. We don’t do any sharp practices; we don’t condone that.

“If you remember, last week they told us it was a logistic problem, and we know what that means. So, why are they blaming marketers for the scarcity? We are not the importer, we are not in charge of shipment; we are not their clearing agent. We don’t even own our own depot. So, how can they blame us for that?” he asked.

Also responding to the NNPC’s allegations, the National Public Relations Officer of IPMAN, Chinedu Ukadike, debunked claims that the oil marketers were responsible for the persistent fuel scarcity.

Ukadike, speaking in a telephone interview on Friday night, stated that marketers established their businesses solely for profit and returns on investment, and would not create artificial scarcity, adding that the heavy capital and incurred bank charges did not allow for hoarding of the petroleum product.

He said, “We are the last in the distribution chain of supply. We break the box of NNPC, and as I am talking to you, IPMAN has over 20,000 filling stations scattered in the nooks and crannies of this country. We established our businesses to be able to maximise profit and have a return on investment.

“There is no sharp practice at all. Anytime there is inadequate supply of petroleum products, you would find out that independent marketers advertise and even go as far as washing vehicles’ tyres and windscreens and instructing our pump attendants to sell petroleum products, because we believe in turnover. The kind of money we are using to buy products, around N40m, is too huge for someone to hoard. We even incur bank charges.

“There is no way we can hoard products. Once they are given to us, we sell them as quickly as possible.

He added, “We are ready to sell for 24 hours if security is provided for us and financial support is also given to us. As an official, I can tell you that we are not involved in any sharp practice. Once petroleum gets to us, we will sell to consumers, because we interface with them and we know how it feels when product is scarce.”

The official further called on security agencies to wade off street urchins profiteering from the scarcity.

“I won’t also say that there are no people, such as street urchins, who take advantage of the situation to engage in sharp practices, using their vehicles to buy petroleum product and then distribute to jerry cans for profiteering. We are aware of those issues, and the national president of IPMAN has advised that marketers should involve security agencies to wade off all those persons standing in front of their filling stations.”

Also speaking to Saturday PUNCH, the Executive Secretary of the Major Energies Marketers Association of Nigeria, Clement Isong, said even though sharp practices existed within the oil sector, it should not be blamed majorly for the fuel scarcity in the country.

He said, “There are many reasons. I don’t doubt that some sharp practices are going on, but it is too simplistic to say that is the cause of the scarcity. So, I don’t believe that they (NNPCL) will say that.”

“I do not believe they said so. I do not doubt that there may be some sharp practices here and there, but I do not believe the NNPCL would say so.”

Explaining the cause of the scarcity, he said, “I have said it is logistic challenges. There are many other problems, but the immediate cause can be classified under logistic challenges.”

To solve the prevailing fuel scarcity, he said the government should “flood the markets with the products.”

“If you wake up and they say there is no product in Nigeria, then you can call or hold NNPC responsible. But now, the custodian of the stock is the Nigerian Midstream and Downstream Petroleum Regulatory Authority, and they have not said that we don’t have products. When Nigerians should hold us responsible is when there is no product. But, there is product in excess.

“The 1.5 billion litres we said about four days ago has increased, because we’ve added more vessels and we are going to make almost three billion litres available. So, distribution should be looked into by the NMDPRA.

“When the regulator sanctions some stations, it will make others sit up and do the right thing. But, as NNPC, we don’t have the power to sanction any station,” Soneye stated.