The queues are back in and outside petrol stations across Nigeria, especially in the northern region as citizens groan over the unbelievable prices of the product and the attendant economic effects.
There are speculations among public and private car owners that marketers effected the hike over an unconfirmed suspicion that the federal government is trying to reduce the price of Premium Motor Spirit (petrol).
However, speaking with reporters on the issue, Bashir Ahmed Dan Mallam, the chairman of the Arewa Oil and Gas Marketers Association (AOGMA), the association of petroleum dealers for northern Nigeria, highlighted some reasons for the increment.
1. Smaller vessels were used to import fuel
According to Dan Mallam, smaller vessels were used to import petroleum products into Nigeria because they could get to ports like di Bonny Terminal (Rivers) and Escravos Terminal (Delta).
He added that bigger vessels are unavailable as Dangote Refinery which has commenced operations, is engaging them to transport its product.
Added to this, some international oil companies are using the vessels for their businesses.
2. Russia-Ukraine War
Dan Mallam went on to state the ongoing Russia-Ukraine war has prompted other European companies to boycott Russian vessels, and also to shun countries that patronise it.
He explained: “Once you buy fuel from Russians, the other European countries will stop supplying to you, and this is because of the sanctions Europe and other Western nations have put on Russia.
“Even if you have your vessel, you are not allowed to buy from Russia. If you do, every other country will isolate you. So this has reduced the amount of fuel importation into the country.”
3. Smuggling
The AOGMA boss said the organisation suspects that some oil marketers, especially the ones close to the borders, are smuggling petrol to neighbouring countries like Benin Republic, where the price is higher, which means good business for them.
Of course, this is not strange as the Nigeria Customs Service (NIS) had intercepted trucks used to smuggle petroleum products outside Nigeria.
4. High interest rates and rising costs
Dan Mallam pointed out that the decision of the Central Bank of Nigeria in March to raise interest rates to 24.75% has impacted negatively on petroleum marketers because they find it bad for them to collect loans from banks at almost 40%.
His words: “Marketers who do not have enough capital usually borrow money from banks to buy petroleum products.
“The official interest rate is 24.75%, but if you are someone who is into financial transactions, you will know that banks also want to make profits, so at the end of the day, you will see that the interest on the loan you intend to collect will be close to 40%…”
The expert said that this has made several small-time marketers stop buying or rely on bigger marketers, meaning they will not get petrol always and when they have, it will be for higher prices.
5. NNPC has not supplied to us – PETROAN
On his part, the president of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, on Monday, April 29, said that the major reason for the current scarcity is that the Nigerian National Petroleum Corporation (NNPC) is yet to supply marketers with fuel
Gillls-Harry claimed: “We have no reason not to serve the public and we are willing to. The only thing is for NNPC to deliver petroleum products to us and we will make sure our retail outlets are open, some of them are even open for 24 hours.”
When fuel scarcity will end
The Nigeria National Petroleum Corporation (NNPC) had on Thursday, April 25, released a statement in which it explained that the scarcity was due to “logistical issues” that have been resolved.
However, nothing has changed. In fact, the situation has gone from bad to worse.
In his view, Dan Mallam said it is tough to state exactly when the scarcity will be over. But he added: “If the assurances by NNPC are anything to go by, then the scarcity may end very soon”.