On Wednesday, the Federal Government announced that it was currently speaking with oil marketers on matters related to the price of Premium Motor Spirit, more commonly known as gasoline, fuel lines, and the payment of bridging claims, among other things, in the downstream oil industry.

As oil marketers had frequently laid the responsibility for the ongoing fuel lines in various regions of Nigeria on the prohibitive price of PMS, it was credibly reported in Abuja that the meeting might result in an increase in the price of gasoline at the pump.

As the government was being urged to progressively raise the price of PMS, the Major Oil Marketers Association of Nigeria joined forces with its counterparts in the Independent Petroleum Marketers Association of Nigeria and the Natural Oil and Gas Suppliers Association on Wednesday.

As some IPMAN members had previously achieved this by selling over the N165/litre government-approved price, IPMAN and NOGASA had already campaigned for the increase in the price of gasoline.

In various states, including Abuja, Lagos, Ogun, Imo, and Niger, among others, some of them currently dispense gasoline at N180/litre and above.

The General Manager, Corporate Communications Department, Nigerian Midstream and Downstream Regulatory Authority, Kimchi Apollo, assured our reporter on Wednesday that the government was currently engaging the oil dealers when asked about the demands of the various marketing organisations.

“We are meeting them now on the various concerns, so don’t worry. By tomorrow you will know what is the outcome,” he stated.

Apollo added, “The NMDPRA is engaging them in a meeting that is ongoing, so I’ll let you know the outcome. Hopefully by tomorrow, you will know the outcome of the meeting.”

The NMDPRA representative responded when asked if only MOMAN would be attending the conference or if all oil marketers would as well. “We cannot engage only MOMAN, we are engaging all of them. We are engaging them so don’t worry. You will know the outcome later.”

The Nigerian National Petroleum Company Limited, the country’s sole gasoline importer, stated that it was not in charge of setting oil prices and would not make any predictions about when the price of petroleum products will increase or decrease.

“If you can call Shell and ask them for comments on petroleum products’ prices, then you can call us (NNPC) and ask us for such comments,” a senior official at the oil firm, who pleaded not to be named due to lack of authorisation, stated.

The source added, “We don’t have any kind of regulatory function in the sector, we are just operators now. It is the government that manages that. And based on the Petroleum Industry Act, we are no longer an appendage of government.

The company is owned by Nigerians and the government is holding it in trust, but we don’t have any governmental role in terms of pricing, control or whatever. Although we are mandated to be the supplier of energy security, we are not a regulatory body.

“So we don’t control the price, we don’t regulate price, we have no control over any of those, as well as other similar issues.”

Although the organisation had alerted the government about the problems in the sector, Mohammed Shuaibu, the secretary of Abuja-Suleja IPMAN, who oversees Abuja, Kogi, Niger, and portions of Nasarawa and Kaduna, claimed to be uninformed of the meeting by the NMDPRA.

He emphasised that certain filling stations in Abuja were currently dispensing the product at N185/litre as they now obtained the commodity above N168/litre from depots, saying once more that the price of gasoline at N165/litre was unsustainable.

Shuaibu added that if the government’s obligation to marketers over bridging claims is not paid, the IPMAN members’ strike will likely continue shortly.

“The cost of petrol at N165/litre is not sustainable. Bridging claims need to be settled and these are issues that should be addressed to avert the impending strike,” he stated.

On Wednesday, as the shortage of gasoline persisted in Abuja and the nearby states of Nasarawa and Niger, some filling stations closed their doors to clients, alleging a lack of goods to dispense.

The Need to Remove Subsidies

Following the current global product scarcity, oil marketers urged for a phased elimination of gasoline subsidies rather than complete deregulation.

The decision was made by MOMAN’s Chairman, Olumide Adeosun, during a briefing with the press on Wednesday.

He claims that the war between Russia and Ukraine will have an “immense” impact on the industry, thus the federal government is being urged to phase down subsidies gradually to prevent “shock.”

The effect of the Russian/Ukraine war cannot be compared to what we experienced during the covid. What we are seeing is that countries are beginning to close borders against importers and products are being reserved for their own citizens alone. So Nigeria is also being shut out,” he said.

Adeosun went on to add that the government of Nigeria has been in control of the system of subsidies for too long and that the vast sum set aside for subsidies should be used to develop other sectors of the economy, such as agriculture, health care, education, and others.

“Because the federal government has allowed subsidies for an inordinate amount of time, we haven’t stored for rainy days. The subsidy is increasing by N4 trillion every year. These revenues would have been used for a variety of things, including agriculture, healthcare, and education.

Following two separate petitions from the Nigerian president to the National Assembly, the Senate had in April authorised N4 trillion for fuel subsidies in 2022.

The MOMAN chairman further said that because diesel prices are rising, selling gasoline at N165 per litre is no longer viable.

Results indicated that the price of fuel has risen from N266 per litre in October 2021 to more than N800 per litre at the moment.

“MOMAN is not short of empathy for Nigerians at this time. The association is pro-business, pro-progress and pro-human.

“We, therefore, stand for phased deregulation of the downstream sector because we don’t want subsidy to be removed all of a sudden in order not to throw the masses into shock. We can no longer sell petrol at N165 because diesel is what we use in our operations. We use diesel to power our trucks, run our stations and depots, and as we all know, the price of diesel keeps rising.

“The options we have now is to either save our businesses by shutting it down or that the government should allow a gradual phasing out of subsidy by allowing price increase gradually.

“It is better to have products at a slightly increased price than not have products at all. The money for subsidies should be injected into another sector. No government can make the current crisis go away because it is a global one, and we all have to adjust,” he said.

Timipre Sylva, the Minister of State for Petroleum Resources, called the contentious subsidy system “a criminal operation” just recently.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority, commonly known as The Authority, and oil marketers reportedly reached a covert agreement last week to raise prices from N165 per litre to between N175 and N180 per litre.

Dr. Diran Fawibe, who just retired as the group chairman/CEO of International Energy Services Limited and holds a PhD in petroleum process economics from the University of Ibadan, claimed that the gasoline supply issue had turned into Pandora’s box that had tainted all remedies.

The current price is unsustainable, according to Muda Yusuf, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE) and former Director General of the Lagos Chamber of Commerce and Industry (LCCI).

Gas supply debts

The Nigerian Gas Association, in the meantime, has urged the Federal Government to pay up the legacy gas supply debts in the power sector since they are a hindrance to advancement.

The decision was made in a press release that the association’s president, Ed Ubong, forwarded to The PUNCH on Wednesday.

According to Ubong, the government could only hold private partners accountable for promises made to support the sector with increased gas supplies once it paid off the backlog of bills.

While the government and NGA members were looking for creative solutions for the industry, according to Ubong, end-users also needed to adopt gas as a workable and environmentally friendly source of energy during the decade of gas.

He added requested that the government institutionalise the use of gas-powered generators for federal parastatals and commercial parastatals that employ generators with a capacity greater than 250KVA.

Kano is impacted by the hike

At several locations throughout the metropolitan area, petrol marketers in Kano on Wednesday arbitrarily increased their rates from the legal rate of N165 per litre to between N200 and N220.

Prior to the change, there had been a two-month-long fuel shortage at filling stations that affected drivers in the city.

On Wednesday, when our correspondent visited a few gas stations, he found that those on Airport Road, as well as in the Paniso and Bompai neighbourhoods, had started selling gasoline to drivers for prices between N200 and N220.

However, the product was N185 a litre at the A.A. Rano filling station on Bompai Road by the Central Hotel roundabout and the Aliko gas station at Paniso beside Jaba.

It was confirmed to our correspondent during a conversation with a fuel attendant at A. A. Rano, who declined to have his name published, that the price had increased since Tuesday.

Additionally, the product was offered fr N220 per litre at the Amkar gas station on Airport Road. The attendant at this gas station claimed that last week, the price rose to N220.

Ibrahim Baba, a driver who was questioned at the Amkar gas station on Airport Road, lamented the price increase and emphasised that the government had asked that the price be set at N165 per litre.

“It is so sad that I can only afford 15 litres of fuel at this price of N220 and surprisingly the NNPC has been advising motorists against engaging in panic buying and that the price remains N165 per litre,” he said.