Fresh petrol scarcity as transporters hike fares on rising diesel price

Despite repeated assurances from the government that the crisis would soon be over, there is seems to be a fresh petrol scarcity looming across major cities in Africa’s biggest oil-producing country as petrol transporters are currently hiking fares due to soaring diesel prices.

On Thursday, finding by BusinessDay showed 40percent of filling stations along Lekki road are currently not selling while several other major cities across Abuja and Lagos are also recording long queues in most filling stations as people scrambled to get petrol for their cars and their electricity generators at a time of rising temperatures.

According to Oil marketers under the aegis of the Major Oil Marketers Association of Nigeria (MOMAN), “operators are struggling along the supply chain to get petrol out of the nuzzles into the cars which are difficult to sustain.”

MOMAN explained that the backbone of petrol distribution is based on diesel, which ranges from transport (vessels and trucks) to energy costs (depots and stations).

Findings by BusinessDay showed the price of Ship-to-ship (STS) transfer, a major freight cost has skyrocketed from $1900,000 to $230,000 per day for a 10-day rental.

“Total distribution margin under the current PMS pricing template accounts for 11.5percent of the PMS pump price despite a significant increase in costs,” MOMAN explained.

Mike Osatuyi, National Operations Controller of the Independent Petroleum Marketers Association of Nigeria says the increase in diesel prices is causing more pain for petrol transporters; however he is unaware of any impending major scarcity.

“I’m not aware of any impending scarcity or any directive from petrol tankers to down tools. I’m currently in Abuja and I can’t see any scarcity around here,” Osatuyi explained.

Efforts to reach Salimon Oladiti, the national chairman of the Petroleum Tanker Drivers (PTD) unit of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) via calls or text to react to this latest development proved abortive as at the time of this report.

Other sources say the current increase in petrol prices is causing more pain for petrol transporters, forcing many of them to prefer trading with independent marketers where they enjoy higher margins rather than major oil marketers.

“Due to the current increase in the price of diesel many petrol tankers are not finding it profitable to do business with the current fix transport price of N18.55 per liter for Lagos, Abuja Suleja axis,” a senior industry player in the downstream sector said.

BusinessDay findings showed another major concern causing the latest scarcity is the fresh tricks petrol transporters are exploring to break even.

Read also: Scarcity pushes average petrol price to N170/litre

Sources say most of the independent marketers in the northern area are hiring southern petrol transporters traditionally used by major oil marketers by attracting them with higher prices above the fixed price of N18.55 for the Lagos, Abuja, Suleja axis.

“Despite buying petrol N155 -162 at the parallel market, most of the independent stations are paying petrol transporters N30 per liter instead of N18.55 because majority of them are selling petrol at N232-N250 unlike the major oil marketers who are under the watchful eyes of government agencies and are forced to sell at N165,” a source said.

A long queue was also seen at NIPCO filling station and Ardova filling stations along Ikorodu road while some fuel stations like TotalEnergies along admiralty visited were under lock and key as on Thursday.

The spokesperson of the NNPC limited, Garba Muhammed, did not return a phone call seeking his comments as of Thursday evening.

Nigerians especially in Abuja have endured an unpredictable supply of fuel for three months now, with filling stations operating at reduced capacity.

The crisis started last February after the federal government announced it discovered methanol in recently imported fuel exceeded Nigeria’s specification. The development resulted in a shortage of petrol and queues in major cities. It has since spread to all parts of the country.