Fuel shortage looms as NNPC goes after debtor traders

The country could be plunged into another round of petrol shortages as the Nigerian National Petroleum Company (NNPC) Limited, overwhelmed by the huge debt of major oil traders, demands settlement of those debts.

It should be recalled that the Nigeria National Petroleum Corporation (NNPC) was reformed and incorporated as the Nigerian National Petroleum Company Limited (NNPC Limited) to assume commercial status under the new Petroleum Industry Act (PIA).

It was then that the Nigerian Road Transport Owners Association (NARTO) threatened to halt the haulage of petroleum products across the country over the cost of N430 per liter of diesel and other operational challenges.

NARTO National Chairman Yusuf Lawal Othman said in Abuja yesterday that the cost of operation has become unbearable and will cripple the transportation of the products in the coming week unless the Nigerian Petroleum Regulatory Authority Intermediate and in Downstream (NMDPRA) takes urgent action to increase the freight rate for transportation. fuel to reflect the current cost of automotive diesel (AGO), commonly referred to as diesel and spares.

Already, Abuja, the national capital, has been hit by shortages for weeks.

Just yesterday, Lagos, the commercial capital of the country, began to experience queues at most petrol stations.

LEADERSHIP investigations revealed that NNPC had cut off the supply of products to the Major Oil Marketers Association of Nigeria (MOMAN) following the large debt it owed the company.

Although there was no official response from MOMAN when our correspondent asked for comment, an impeccable industry source told LEADERSHIP that NNPC, now overburdened with subsidy payments, has moved to collect debts. unpaid wherever they exist.

Industry operators have accused NNPC of selective treatment where major traders are offered products on credit agreements while independent traders are forced to pay before receiving supply.

They said the situation has now escalated to such an extent that heavy debts are affecting the company’s operations.

At the time of writing this report, the NNPC had not yet officially responded to our requests.

Meanwhile, there is anxiety and confusion among motorists in Lagos who have embarked on panic buying as the shortage appears to have hit parts of the state, particularly the island, the mainland and neighboring states.

Our correspondent observed long lines of unusual vehicles at various gas stations in Ikoyi, Victoria Island, Lekki and Maryland, as well as in Ikeja, the state capital.

Although transportation fares have remained unchanged, long queues at gas stations have aggravated traffic congestion at these locations.

This comes at a time when controversy over the removal of gasoline subsidies or otherwise still rages on.

NNPC Limited has always allayed fears of a surge in the supply of petroleum products, ensuring their availability.

Furthermore, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has assured Nigerians of the availability of petroleum products throughout the country.

IPMAN Chairman Chinedu Okoronkwo gave the assurance as he reacted to the return of fuel queues in Lagos.

He told our correspondent by telephone that members of his group usually secure bank facilities and make payment to NNPC before receiving the supply.

Okoronkwo also called on the NMDPRA to speed up the payment of billions of naira to traders as a transition cost.

He said, “We want to assure Nigerians that we are ready to cooperate with the government to ensure an unhindered supply of petroleum products throughout the country.

“IPMAN calls on the NMDPRA to expedite the payment of transition debts owed to traders by the defunct Petroleum Equalization Fund (PEF) to enable transparent operations in the industry.”

Okoronkwo noted that the bridge payment was necessary to encourage traders to transport gasoline from the depot to other depots that are experiencing a supply shortfall due to distance.

He said the NMDPRA, the successor to the PEF, had assured traders of payments following a series of meetings on the matter.

Meanwhile, NARTO denounced the delay in paying around 45 billion naira in transition fees, demanding an increase in the transport allowance factored into the pump price of petrol.

Earlier this year, the federal government hinted at a 20% hike in the cost of freighting gasoline across the country, as part of measures to boost revenues for transport owners. The increase would have raised the cost of transitional petrol to N9.11 per liter from N7.51 in the Petroleum Products Prices Regulatory Agency, PPPRA’s petrol pricing model.

Decrying the prevailing situation, Othman said, “We will tell them (the tanker drivers) to park if nothing is done because we cannot operate in this way.

“Consequently, carriers whose freight rate is fixed and regulated cannot sustain the business if nothing is done.

“We cannot operate. We cannot work if nothing is done to increase the freight rate. The condition is unbearable because of the cost of diesel.

He urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to urgently increase the freight rate to reflect the current cost of diesel and Automotive Gas Oil (AGO) spare parts.

According to him, the ex-depot cost of diesel jumped to N401 per liter on Monday.

Othman shouted that he could reach 420 naira per liter at gas stations if something is not done urgently.

To ensure there is breathing room, Othman asked the federal government to convene a meeting of stakeholders to raise the freight rate and address other pressing operating cost issues.

“We are bringing in the CEO of the downstream regulator. He needs to sit down with us immediately and ensure that the freight rate is increased to reflect the rising cost of diesel and other spares.

“We have a problem. Today the price of AGO ex depot is N401 per litre. This means in Abuja, Kaduna, Kano it will reach N420 to N430. At the gas station it will reach as N450.

“It’s just to regulate our increasing operating costs. It’s as simple as that. Otherwise our people have parked their trucks and more people will park.