The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has shut down of the operations of seven depots in various locations in Nigeria for dispensing petrol at outrageous prices to retail outlets.
Recall that the independent petroleum marketers had in the past months complained that they were buying the product above N200 per litre from the private depots, making it impossible for them to sell the product at government approved price.
The chief executive of NMDPRA, Mr. Farouk Ahmed told journalists in Abuja yesterday that depots belonging to Ardova, Rainoil, TCL, Bluefin, and NEPAL were closed.
He said two of the depots – Ardova and Rainoil are in Lagos – two in Warri, one each in Oghara, Port Harcourt and Calabar.
He said all the facilities of the affected firms were shut down
Ahmed explained that depots contravened the provisions of the Petroleum Industry Act 2021, and also contributed to the ongoing petrol supply crisis in the downstream oil sector.
He said the federal government had had several engagements with all stakeholders in the downstream oil sector.
The stakeholders, according to him, were the Major Oil Marketers Association of Nigeria (MOMAN), Independent Petroleum Marketers Association of Nigeria (IPMAN), Depot and Petroleum Products Marketers Association of Nigeria (DPPMA), among others.
However, he said despite the engagements with the dealers and the fact that the sector is still a regulated market, the affected depots went ahead to hike the cost of petrol far higher than what was approved for them.
“As the government and regulators, we had several engagements with all the stakeholders including the major marketers, independent marketers, transporters, the suppliers, the NNPC as well as other relevant entities interested parties to see how we can address the distribution bottlenecks.
“We sat down with marketers to discuss these issues and how to address it. But the marketers have continued to increase the ex-depot price beyond reasonable margins.
“The increase is outrageous despite the fact that the NNPC (Nigerian National Petroleum Company Limited) sells at a very low price to them. We had meetings with them (marketers) and asked them to comply with the approved price, but they have continued to increase the cost.
“Now, the market is not deregulated. So we’re still in a regulated environment as far as the gasoline or petrol is concerned, agitations and complaints were addressed.
“For example, when we started with the transporters, the president approved additional N10 for transporters to cover the transportation costs as a result of the high costs of diesel which is the main source of transporting other products as other products are across the country.
“With regards to marketing companies, there was an increase in the freight rate related to the calls on the actual cost of bunkers. For example, Lagos to Lagos, in the past used to be about 16 to $19,000 a day to charter so then it escalated to about $35 to $40,000 per day, to Calabar, for example, it had equally increased.
“Then we sat down with the marketing companies and agreed to give them some palliatives through NNPC, as well as through our own regulatory control areas. But the market has continued to increase the cost of ex-depot price. It has gone beyond expectation and beyond reason. And Nigerians have been suffering due to that,” he said.
