Why are you experiencing fuel shortages right now?


For the past week, fuel shortages have been reported in Lagos, Kaduna and other cities in the country.

Nairametrics previously reported that the fuel shortage in Lagos was caused by harassment of tanker drivers. However, we have deduced that there are more reasons why you are currently out of fuel.

In a recent interview on Channels Television, Independent Petroleum Marketers Association of Nigeria (IPMAN) Deputy National Chairman Zarama Mustapha outlined some reasons why some cities are experiencing fuel shortages.

He explained that when the Nigerian National Petroleum Company (NNPC) Limited imports gasoline into the country, the product is taken from the mother ship to depots, then to various retail outlets across the country by truck, where it is sold. to customers

recent challenge: Last week, there was a delay in the discharge of gasoline from the mother ship to the depots due to some challenges between the private depot owners and NNPC, which is the main gasoline supplier. The challenges related to private depot owners collecting gasoline at the approved price per liter and refusing to sell to independent traders at the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) approved price.

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The price: NNPC depots sell gasoline at N148 per litre, but private depot owners sell to IPMAN at N195 to N210 per litre. Private depot owners are complaining about the cost of transportation from the mother ship to their private depots due to the escalating cost of the dollar. Private deposit owners buy their dollars at the black market exchange rate.

Need for private warehouse owners: NNPC’s facilities for storage after importing gasoline are not sufficient, so private depot owners who have the facilities also store gasoline. The entire oil supply chain (including distribution and refining) is fraught with challenges.

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Impact of security agencies: Mustapha said that another hot topic that poses a challenge for gasoline distribution is the interaction with security agencies, including the police and the military. According to him, officers are at charging points and roadblocks across the country and this affects the gasoline supply chain. He said:

  • “If you go to Lagos now, you will see chaotic situations in the warehouses, people spend 3 days loading a product that should not take more than 3 hours.”

Meanwhile, Christmas is approaching: Mustapha said he believes NNPC management, regulators and other stakeholders are doing everything they can to make sure there is ample supply of gasoline this Christmas period, which is a month away. However, he expressed pessimism about the intermittent fuel shortage, which he said needs action by regulators, the NNPC and private tank owners.

According to Mustapha, previous governments have not been planning enough to cope with the growing population and growing demand for oil supply in the country. He said the challenges are too great for a single government administration to tackle.

The necessary solutions: Mustapha said Nigeria needs to have refining capacity in the country. According to him, the combined refining capacity of the Port Harcourt I and II, Warri and Kaduna refineries is 450,000 barrels per day (bpd), which is not enough to meet demand. So, the country will need the Dangote Refinery to make up for the difference in capacity.

  • Mustapha also said the country needs to build more warehouses for storage, and regulators need to involve private warehouse owners and NNPC to decide how they can get the best price for the common man on the receiving end of the shortage, highlighting the fact that IPMAN cannot do business at a loss.

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