Oil marketers in Nigeria have raised the alarm over the significant rise in the ex-depot price of petrol since the removal of subsidies.
The increased costs have directly impacted retail prices, causing concerns among the Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN).
According to Mike Osatuyi, the national operations controller of IPMAN, the ex-depot petrol price has soared to N479.50 per litre, more than doubling the pre-subsidy removal amount. Previously, a truck carrying 33,000 litres of petrol cost N7.7 million, but it now stands at N21.8 million. This steep increase has burdened marketers, making it difficult to cover the soaring expenses.
Osatuyi explained, “Marketers are not finding it easy because you are paying N7.7 million for one truck but you are unable to carry it. So, you need an additional N13.8 million before you can get one truck of the product.”
Fluctuating Prices Linked to Crude Oil Costs
The ex-depot petrol price now depends on market realities, particularly the fluctuating crude oil prices. Osatuyi says the current crude price is $76 per barrel, closely tied to the exchange rate. While the unification of the black market and official market rates remains unclear, the pricing model employed by the Nigerian National Petroleum Corporation (NNPC) indicates that approximately N630 or N650 is used per dollar.
Osatuyi emphasized, “They have not come out, but we, too, have put the figures to show you what the price is.”
Billy Gillis-Harry, the national president of PETROAN, echoed concerns raised by oil marketers, stressing the financial strain imposed by the substantial difference between the old and new ex-depot prices. Gillis-Harry explained that members of PETROAN are finding it challenging to secure funds to cover the increased costs, which will incur additional charges and expenses.
He stated, “Our members are struggling to raise funds to pay for the difference. It’s going to come at a great cost with bank charges and different things that will be attached to that.”
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Focus on Domestic Refining Capacities
Addressing the NNPC’s suggestion that oil marketing companies can now import products due to the cost-reflective pump price, Gillis-Harry emphasized the need to prioritize enhancing domestic refining capacities. He welcomed the idea but emphasized the importance of creating an enabling environment for increased collaboration and reduced import dependency.
Gillis-Harry emphasized, “We should focus more on making sure that our own in-country refining capacities increase and the refineries are working.”
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