Nigeria: Petrol Glut Hits Nigerian Market As NNPC Struggles for Buyers

Photo: Vanguard
Fuel pump.
5 June 2018

The efforts of the Nigerian National Petroleum Corporation (NNPC) to sustain the availability of petrol in the country with massive importation of product have led to a glut of petrol in the market, with the corporation struggling for buyers, THISDAY's weekend market survey revealed.

NNPC became the sole importer of petrol in October 2017 when the private marketers stopped importation on account of dwindling margins, occasioned by the high cost of foreign exchange and the rising price of crude oil at the international market.

Initial attempts by the corporation to bridge the supply gap were unsuccessfully, resulting in acute fuel crisis that marred the Christmas celebration and lingered to the first quarter of 2018.

However, with sustained importation, coupled with lower demand for fuel during the rainy season, the NNPC was able to stabilise product supply as the ex-depot price, which was N160 per litre at the peak of the crisis, dropped to N134 at the weekend.

THISDAY's investigation showed that more than 22 depots were stocked with petrol imported by the NNPC in Lagos at the weekend, compared to the usual 10 - 14 depots at the best of times.

The prices range from N134 - N135 per litre in these depots, which belong to both major marketers and independent marketers.

The depots include: AA Rano, Ascon Petroleum, Bovas, Chi-Pet, Fatgbems, First Royal, Folawiyo, Gulf Treasure, Integrated Oil and Gas, MRS Oil and Gas Limited, Obat Oil, Africa Tanker, Sahara Energy, Swift Oil, Techno Oil, and Stallonire.

Others include: NIPCO, Oando, Mobil Oil, Forte Oil, Conoil, and MRS Oil and Gas Plc.

It was also learnt that NNPC stocked petrol in Atlas Cove Depot in Lagos, which receives imported product from very large vessels and pump to Ejigbo Satellite Depot, Mosimi Depot in Ogun State, Ibadan Depot, Ore Depot in Ondo State and Illorin Depot, collectively called System 2B network, which accounts for 60 per cent of petrol supply in the country.

THISDAY gathered that with the large availability of petrol in System 2B, there is a glut in the market.

Marketers, who spoke to THISDAY at the weekend, stated that it is now NNPC officials that chase the private marketers to buy petrol, as against the old practice where marketers would pay for NNPC product without getting the product for several months.

"NNPC literally beg marketers to come and buy product these days because they have too much stock in their system. There is product virtually everywhere," said one of the marketers.

"In those days when product was scarce, it was difficult to pay for NNPC product and get their pro-forma Invoice (PFI). You needed to have a good contact in PPMC to find your way and make the payment. And even when a marketer had succeeded and got PFI, it would take several months to load the product itself and people's money was tied down. But the situation is different now because it is easy to get product," said another marketer.

The spokesman of NNPC, Mr. Ndu Ughamadu could not be reached at the weekend for his comments on the fuel situation.

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