Lagos — Mr. Leke Talabi is the assistant national secretary of Independent Petroleum Marketers Association of Nigeria (IPMAN) which was set up in 1978 by the military administration of the former President Obasanjo in order to give indigenous petroleum marketers the opportunity to participate in the downstream sector. In this chat with Sunday Vanguard, he talks about the role of IPMAN in the oil sector, the reason there was heavy traffic along Mile 2, Apapa Road in Lagos and the effort of the government to stop the menace.

WHAT are the roles of IPMAN in the oil sector?

As an association, we cater for the interest of our members because IPMAN is an umbrella body for all the indigenous participants in the retailing of petroleum products through different petrol stations. The industry is regulated with a lot of monitoring. Government has deregulated partially the sector in order to commercialise NNPC and its subsidiaries and create a level playing ground for operators in the sector.

The gain of deregulation would have been to improve competition but what is happening today is that all roads leads to NNPC for product supply and they determine the price. There is guided deregulation in the case of diesel and kerosine, while the main product, petrol, is still under the NNPC control. IPMAN as a body only seeks for opportunities for its members nationwide so that they can be more relevant in the sector.

What opportunities do you seek for from government?

One opportunity is to participate in the establishment of refineries because when you look at the size of our members and our combined assets which is over N260 billion, you will see that we control about 65 per cent of the distribution of products in circulation.

Is that why IPMAN members always want to fix the price of the products?

No. Let me tell you that outside government, we are the second largest employer. The major marketers are restricted. They are only located in major cities and they are interested in how to make their money quickly. Anywhere they cannot break even between three to four years, they don't want to be there but the independent marketers go to rural areas. We ensure that products are made available in the rural areas. As NNPC has twenty one depots in Nigeria, we also have twenty one functional depots.

Is that why you try to determine your own pump price?

I am not evasive about it. We are not determining price. There is a body set up by the government which is called Petroleum Products Pricing Regulatory Agency (PPRRA). It has its board on which, of course, because of our strength, we are also involved. Labour is there, NNPC is there, government is there. PPPRA is there to bridge the gap between the local and international price. The body makes sure that what has been agreed is N70 per litre of petrol but because kerosine and petrol are not made available by NNPC, we have to import. Therefore, for any participant, you either take products from NNPC or import based on approval from PPPRA, otherwise the international price will not be able to key into the local price. Government also created Petroleum Support Fund (PSF) which is a subsidy to march the price with the local but what we are saying is that government regulation is still there but we are just crying that margins given to marketers is not commensurate with the investment.

Why is the pump price in the North and in the East different from the N70 official price obtainable in the West?

These products are not made available at the government depots. Government created depot zones that if you are within a radius of between 60 kms and 100kms, you are suppose to load at that area and it is assumed that when you load, the price will stabilize but when you now look at a person coming from Ado-Ekiti to Lagos to come and load because Ore-depot is not functioning, how do you now sell at the same price considering the running cost. Also there is an assigned volume which is based on potentials of what each can sell but now, whether you can sell ten trucks a day does not matter, no filling station can get more that two trucks. To support this, you either buy from private depot or lose customers and because private depot too imports, there are additional costs.

What has your association or the government done to make sure pump prices are equal throughout the country?

There is a body set up by the government called Petroleum Equalization Fund (PEF) which is saddled with the responsibility of making sure that price is uniform across the country. We have advantage in the west here because the depots are functioning but people in Maiduguri are in a far distance.

Most of the pipelines are ruptured and that means that the areas to be supplied will be by road. In the west, major marketers and other private depots now receive product by sea through the jetty outside the government depot which is the reason we have more products. But people come all the way from the north and east to load. However, government allowed bridging of product whereby they load and are re-imbursed but because of the rising cost of spare parts, risk and so many things the subsidy given to them for re-imbursement is not enough to enforce that uniform price of products. IPMAN does not regulate price, it does not fix price.

There is this issue of private refineries being issued licence to refine products locally. Have they started work?

Yes there are private refiners that were licenced to work but the fear is that there was no concrete agreement that if there is a change in government, they can still be recognised. What the government can do is to make an appeal to OPEC that we should allow a portion of our products for local refining so that we won't be violating OPEC agreement.

As our nation is the third largest producer, let there be a law backing the private refineries. If that is done, there would be more refineries, there would be more products in the market and the issue of pricing will become competitive. Private refiners are discouraged. Some are given licences and it expires and the government should encourage the stakeholders to participate.

Why have the tankers taken over the express roads blocking other users especially along Mile 2, Coconut and Mowe on Lagos Ibadan expressway?

Movement of tankers to only one axis could be a cause since there are about ten private depots on that Apapa route. Though driving habits of the drivers could cause it, there is also lack of adequate parking space in the depots for tankers to come in for loading and that is why there is a build up of queues on the road. If government had been able to build tanker park, it would just be a question of radio communication for the tankers to come in for loading.

Lagos State government is already arranging for a trailer park at Orile but if it is back up with law, our people are law abiding but I think it calls for early action on the part of the government and stakeholders to have trailer parking lot for the road to be decongested.