Oil Marketers Raise Fuel Prices Amid Worsening Scarcity

• Oil marketers have attributed the current wave of petrol scarcity to ongoing logistics problems
• They claimed that since there was now a limited quantity, oil marketers might simply distribute what they have
• Transportation costs have gone up because some filling stations are now charging between ₦800 and ₦1,000 for a litre

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

Oil marketers have explained that the reason for the shortage of Petroleum Motor Spirit and gasoline is the persistent logistical issues.

The president of the Petroleum Products Retail Outlets Owners Association (PETROAN), Billy Gillis-Harry, made this revelation during his Monday appearance on Channels Television's Morning Brief.

He asserted that oil marketers might distribute only what they have because supply is currently limited.

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Gillis-Harry said:

“I think until we get our supply challenges sorted out efficiently and abundantly, we will not be able to get out of this circle. I believe you must have heard the NNPC’s communications director who explained that the issues at stake are still logistics-related.

“So until they get that resolved, we may just be managing the little they bring, and give to us to distribute among our members. NNPCL is doing its best to bring in products bit by bit, and we can only supply what we have.”

Logistics issues causing fuel scarcity

When asked to give further explanation on what the logistics challenges were all about, he said:

“The logistics issue is about ship-to-ship transfer. Until the ship gets products, it cannot deliver to any of the depots. And until depots have products, we the retailers cannot also have access to products,”

However, Gillis-Harry gave his word that marketers and the NNPCL were discussing supply issues.

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He said:

“We have been speaking with NNPCL. We encourage them to do more, and I can assure you that they are trying their best.”

Gillis-Harry's explanation of the scarcity follows protracted shortages, particularly in Lagos, the country's north, and other areas.

Over the course of the weekend, though, the shortage reached Lagos. According to Channels Television, some filling stations have started selling a litre of the product for between N800 and N1,000, which has increased the cost of transportation.

But other gas stations weren't selling the product because black market rackketeers were taking advantage of the circumstances to make quick cash.

Bidemi Opeyemi told Legit.ng,

"Over the weekend, I had to buy fuel at a very costly amount at N1,000/litre because it was not available at several filling stations. the few outlet that had it increased prices.

According to reports that surfaced last week, the Nigerian National Petroleum Company Limited owed foreign oil dealers money, which was the reason for the scarcity.

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Olufemi Soneye, NNPC's chief corporate communications officer, however, refuted the report in a statement on Sunday.

Soneye said since transactions in the oil trading industry are done on credit, it is common to owing money occasionally.

What you need to know

Since announcement of the removal of fuel subsidy by president Bola Ahmed Tinubu, the cost of petrol has drastically increased by a wide margin.

The president announced the removal of subsidy on the 29th of May 2023.

Following the removal of subsidy, petrol pump prices jumped from about N198/200 per litre to N617/litre in 2023.

According to a report by the statistics bureau, 'Premium Motor Spirit (Petrol) Price Watch for May 2024' the price of petrol increased on a month-to-month basis by 9.75 percent from ₦701.24 per litre in April 2024.

Filling stations adjust petrol pump prices again

Legit.ng earlier reported that filling stations in Abuja, Lagos, and other states have again adjusted their petrol pump prices upwards amid worsening fuel scarcity that has frustrated motorists and commuters.

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The price hikes, which vary across regions, have added to the growing burden on Nigerians grappling with the rising cost of living.

Legit.ng observed that motorists were buying fuel at some open filling stations at prices ranging from N750 per litre to as high as N900 per litre, depending on locations.

Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.

Source: Legit.ng