Fuel Queues: PETROAN Blames Distribution Issues, Proposes Marine Transportation

 

Amid the lingering fuel scarcity in some of the busiest cities in the country such as Lagos State and Abuja, the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has decried the poor supply of Premium Motor Spirit (PMS) to its members.

This is despite the Nigerian National Petroleum Corporation (NNPC) last week placing the blame on road projects in Lagos, insisting that it had a national PMS stock of over two billion litres, equivalent to “over 30 days of sufficiency.”

National President, Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, spoke during a live appearance on Channels Television’s Sunrise Daily on Monday.

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“The issue is simply a dearth in supply, a difficulty in ensuring that supply meets demand. And I believe NNPC themselves are doing the most they can to try to bring succour to the Nigerian public. But I think it needs to move faster,” he said.

“There is no other difficulty that we can trace to this issue. We really can only supply to the public what we have been supplied by NNPC, knowing full well that we are not importers of PMS and there is no production of PMS in Nigeria from our local refineries.

“Right now, if we’re hearing our senior partners talking about road construction as a reason, we need to all sit down and find a way around it.

“If you ask me, I would say we can do better than that because if two billion litres is sitting down somewhere, there are so many ways that we can be able to transport the products. We can go by marine (for instance).”

 

The PETROAN boss decried a situation where one billion litres of PMS is “sitting down” and its members are unable to pass it on to the next person in the distribution chain.

He said if the product was available, the retail outlet owners should be able to access it, adding that they were ready to do everything possible to help.

Addressing the fuel price hike, Gillis-Harry stated that PETROAN has a bulk purchase agreement with NNPC such that the corporation was duty-bound to sell to its retail outlet owners.

“But don’t forget that the 21 depots in the country today that are owned by Pipelines and Product Marketing Company (PPMC) are not functioning well because the refineries are not working and pipelines connecting these depots are not working well,” he said.

Landing Costs Should Raise Fuel Price To N220

 

The PETROAN boss explained that the varied landing costs, in conjunction with its members purchasing products from private depot owners as opposed to allocations from NNPC depots, contributed to the inability to sell at the authorised pump price of N165 per litre.

“There is no PETROAN member that would sell above N165 if we got that product at the price that we have agreed with NNPC. But obviously, there are logistic constraints: ship-to-ship transfer with other charges, port charges, different kinds of charges and taxation along the way.

“First, product is imported or got through the (crude-for-fuel) swap process and then a massive mother vessel brings the product to our waters,” he said.

“From that point on, subsidy is gone because from the mother ship, it goes to smaller daughter vessels that will now start to do deliveries, whether it is going to an NNPC depot or going to a private depot.

“Once the subsidy payment ends and other logistic costs are introduced, including paying for vessels, paying for charges, port handling, landing costs, certain levels of taxing; that’s where the price comes in.

“Don’t forget that most of these charges are dollarised. So, I even sympathise with the depot owners,” he said.

According to Gillis-Harry, NNPC normally would sell the product to PETROAN members at below N150 per litre, enabling them to meet consumer demand at the agreed retail price.

“(But) as it is today, if our full landing cost is N199, N200, I think there is no way we should sell for less than N220,” he said. “That is if we are buying product that is not allocated to us through the NNPC as it is today. Now, the cost elements that come in there are very huge and they are not paid in Nigerian naira.”