Subsidy removal has doubled depot petrol price, say marketers

Prices of petrol at depots have increased more than 100 per cent following the official removal of subsidies since May 29, The PUNCH findings have shown.

National Controller Operations, Mike Osatuyi, on Tuesday, told The PUNCH that many downstream businesses were currently struggling to stay afloat as a result of the hike in prices of products at the depots.

According to him, the price of a 33,000 metric tons tanker of petrol that was sold at N8m before subsidy removal now goes between N22m and N23m depending on the location of the filling station from the depots.

The PUNCH noticed that most filling stations in Lagos were shut despite the Nigerian National Petroleum Company Limited declaring to have sufficient products in the country to last an extra month after subsidy removal.

He said, “There is fuel in the country because NNPCL told us they had imported enough products to last about 28 days. Maybe those stations were shut because they don’t have money to buy fuel.

“Price of one tanker of petrol is now around N22.5m in Lagos and Ogun and around N23m for those outside Lagos and Ogun.”

When asked whether marketers had been able to access forex for importation, Osatuyi said they needed to go through clearances and obtain licences before mass importation could commence.

A source in the Depots and Petroleum Marketers Association of Nigeria had told The PUNCH that NNPCL had ended ship-to-ship operations since full deregulation of the downstream sector was announced, and that prices would be jerked up following such a move.

According to the sources who were not authorised to speak on the matter, the Corporation had since May 29, started selling products to marketers at international prices.

The DAPMAN sources confirmed that marketers were being asked to re-access the NNPCL portal for re-registration.

“We no longer have access to the NNPCL portal and we have to register again to place an order,” he said.

On his part, a former Chairman, the Major Oil Marketers Association of Nigeria, and Chief Executive Officer, 11 Plc, Tunji Oyebanji, told The PUNCH that the price of one truck- 33, 000 metric tons of petrol is currently as high as N21m.

“Removal of subsidies is one of the best things to ever happen to Nigeria because in the end, the gains will surpass the supposed losses. Currently, many smaller companies in the downstream sector would fold up and be bought over by the bigger ones because they won’t have enough money to buy new products.

“Price immediately shut up to N21m for one truck of petrol- something we used to buy at around N4m. Many would have to go borrow because the price difference is just too much.”

He added that marketers expected petrol consumption volume to fall by 40 per cent.

The NNPCL had in 2022 said Nigeria consumed about 66 million litres of petrol daily.

He said, “This is the time we would know the real consumption of Nigeria because there would be no more smuggling since subsidies have been stopped.

“But since subsidies have now been removed, our responsibility should be making sure that the government uses the money they would have used to fund subsidies for the right things.”