- Oil marketers in Nigeria might face difficulties in affording full fuel orders due to a recent directive from NNPC Limited.
- The directive requires marketers to merge their previous fuel orders with new ones at adjusted prices after the removal of fuel subsidies, with the option of receiving a refund for those unable to afford the new fuel truck rates.
- According to Nairametrics’ report in April 2023, it was predicted that only major players in the downstream sector, such as Conoil, Ardova Plc, MRS Nigeria, 11 Plc, AYM Shafa, AA Rano, and others, would likely endure the removal of fuel subsidies.
Oil marketers in the country may still not afford full premium motor spirit (fuel) orders following a new directive issued by the Nigerian National Petroleum Company (NNPC) Limited over the weekend.
According to Punch, the directive instructs marketers to consolidate their previous fuel orders with new ones based on the new prices resulting from the removal of fuel subsidies. The NNPC also offers an alternative option for those marketers who are unable to afford the new fuel truck rates: they can receive a refund.
A part of the statement read:
- “Following the full deregulation of PMS, NNPC Retail has made the following options available to help customers manage the impact of the additional cash flow requirement: Marketers now have the option of consolidating pre-paid self-owned tickets for fresh tickets in line with the revised price.
- “Interested marketers can engage their respective NRL Depot Representative for guidance on how to initiate this option. Also, there is an option for a cash refund.
- “Marketers who are interested in initiating this option should send in an official request addressed to the MD NNPC Retail. The request should include evidence of payment and order details (RRR number, Sales quotation number, and Meter ticket number).
- “Upon receipt of the official request together with the above-supporting documents, your refund request will be made processed.”
Backstory
Oil marketers have recently expressed concerns about their inability to raise sufficient funds to purchase new products from NNPC Limited, following the price increase resulting from the removal of fuel subsidies. According to their statements, despite the NNPC having ample stock in the country, marketers still have to purchase from them at higher rates, which some of them cannot afford.
Punch also reports that Mike Osatuyi, the National Controller of Operations for the Independent Petroleum Marketers Association of Nigeria (IPMAN), stated that affected filling stations are facing product shortages due to the increased prices at the depots.
As a result, filling station owners are currently required to have between N22.5 million and N23 million to purchase a truck of petrol, whereas the price was previously N8 million before President Tinubu announced the removal of fuel subsidies on May 29.
The expected impact on the people
In the coming weeks, it is anticipated that smaller downstream companies, unable to afford the new depot rates imposed by the NNPC Limited, will be forced to cease operations, while larger businesses will be able to sustain themselves due to their financial capacity. This echoes the findings reported by Nairametrics in April 2023, which suggested that only the major players in the downstream sector would likely survive the removal of fuel subsidies.
Some of the notable companies in this category include Conoil, Ardova Plc, MRS Nigeria, 11 Plc, AYM Shafa, AA Rano, and several others.
It is crucial to recognize that the closure of smaller companies in remote communities will have an impact on the supply and demand dynamics. Residents in these areas will face difficulties accessing fuel within their localities, creating a dilemma for them.
When the elephants fight, the grass suffers.
Some.news are not worth wasting data in. Why cant an average petrol station owner afford a truck load of petrol worth N23m?
All the monies they sell everyday is deposited with a commercial bank and why not ask for overdraft or loans from your bank?
Why must everything in nigeria be by cash? What are the banks doing if they cant issue loans and overdrafts to healthy businesses like petrol stations?
Maybe the owners are jittery about sharing profits with banks as interest on loans. That’s why we are where er are today. ….
What goes around comes around; the moment the subsidy regime was removed or èven before they created artificial scarcity and no sooner than govt plans on fuel changed they increased the price of old stock ìn there storage to reflect the price of new stock which they cant èven procure now.
Whichever one of them goes out of business thats his lot cos they acted ìn shylock and exploitative manner with reckless abandonment of the teeming populace.