“Marketers would not allow it to happen; we are expecting reduction in price”
Alhaji Alanamu Balogun is the Lagos Chairman of Independent Petroleum Marketers Association of Nigeria (IPMAN). In this interview with Shipping Position Daily correspondent, Dapo Olawuni, he spoke on the several challenges of fuel supply in Nigeria, especially those bordering on the sharing formula of products by the NNPC, as well as lack of parking space at the petroleum tank farms, among others.
‘’There is no evidence that fuel is smuggled to another country, if anybody has the evidence, let them come forward with it”
“If the Lagos State Government demolishes any filling station, we will go on strike”
What is the current situation on fuel availability and supply in the country?
Presently, the situation has improved in Lagos State, you can see that things have now normalised in Lagos State, the only problem we have now is at neighbouring states like Ogun State, Kwara State and other Western states. The sharing formula like I told you the other time still needs to be improved upon, so that we can be able to reach all our extended zonal areas. But before the middle of this month, they would return our bonus, which is 50 percent, before now we started sharing 30 percent. Major marketers have their own depot at Apapa where they load products, but IPMAN does not have anywhere except NNPC depot; when Ibadan depot is not functioning, it is we at Lagos that gives them products, we are giving Suleja, and Ore. So, the NNPC needs to look at the increment now because it is getting late and the more it gets late, the longer the problem continues, if there is no product in these neighbouring states, it would affect Lagos State.
For now, it is only NNPC that is importing; do you see government allowing marketers to import alongside?
The government cannot meet the demand, so we need them to adjust their policies, they have said that marketers should go and get bank guarantee to import products, but no bank is ready to give marketers money because they know that if they are given, it would not meet up government demands. Also, the money government is owing marketers should be paid, they should now roll-out a policy that any marketer that wants to import should be given an official rate by the government and not to go and buy dollars from the black market. But if government expects us to go and import without any bank guarantee, no bank is ready to finance anybody now.
If the government can deregulate the PMS and allow marketers to sell at their price, this would further reduce the problems.
Is there still subsidy for marketers, and do you think PEF should continue?
The first problem we are supposed to tackle before the equalisation fund is how to get the product and the government’s role; right now they are asking marketers to go and import and they are not ready to subsidize, no marketer would import, but if government gives them the assurance that they would give subsidy, they would go and import. The product being imported by NNPC is also being subsidised, so I see no reason they should not give it to individuals to bring the products. As it is, all our refineries are down and this is not good for a big country like, we have four refineries that are not functioning, if the refineries were working, there would not be need for importing. If they cannot repair all, at least they should fix two and allow investors to come in and give us modular refineries.
We have heard that prices of fuel might increase very soon, how true is this?
We are hearing it also, but even if it is going to happen, the marketers would not allow it to happen because the capital we are using to buy one truck of product is too high, we are expecting reduction in price and not to increase it. When they increase the pump price in the country today, I can assure you that everything in the country would increase because fuel determines the economy of this country, so government should be very careful about increasing price because the marketers in the downstream sector would not play along with them, because already we are talking about getting money from banks to do importation, so it is like they want to kill marketers finally, including all Nigerians, because what this means is that prices of food items in the market would increase.
But are you aware that in other neighbouring countries, PMS is sold for as high as N400?
Even at that, these countries do not have crude oil, most of their products are imported, but here in Nigeria we have the crude oil, the only problem we have is the refinery, they should increase the number of refineries and revive the ones we have, when Nigerian population was not as large as it is, we had four refineries, looking at our population today, the refineries supposed to have increased, so you cannot compare Nigeria with these neighbouring countries. Even if we want to make comparisons, we should be looking at foreign countries which are way ahead of us in the oil industry.
How can smuggling of the product across borders be curbed?
This is very easy, we know the number of filling stations we have across the borders and we have all our security agents there, any product that wants to cross over to the Republic of Benin or across any borders should be monitored by the security agents, come to think of it, how many products are we sending to Benin Republic? Since the fuel crisis started in November last year, the product that has been going to Ogun State from satellite depot in Lagos is just two trucks, there is nothing entering Benin Republic, we have our own internal problems that government should tackle, instead of looking for excuses outside the country. The Republic of Benin we are talking about, what is their population? We have our own internal problems and we know it. I know that the security agents at the borders are doing very well, honestly speaking, they would not allow any vehicle without proper documentation to cross the borders, the Civil Defence and the DPR are doing a marvelous job there, they make sure that marketers are selling at regulated pump price, the product we have is not even enough for Nigeria, not to talk of sending it to other neighboring countries. The neighboring countries that we are talking about also have opportunity of importing by themselves, there is no evidence that fuel is smuggled to their country, if anybody has the evidence, let them come forward with it.
Don't you think there is compromise on the part of customs and other agencies?
Even if you are suspecting the customs, we have the civil defence and the DPR, if security agents are allowing trucks to cross the borders freely; it shows that the security agencies in that axis are not working. At all the borders across this country that we know, we have never seen anywhere that they are taking products out with trucks. We have a monitoring team that consists of IPMAN and all security agents, whenever we go there every week, and when we give you product, we go back and monitor to ensure that the product is sold, we go there several times and NNPC have report of these areas, we have reports of the joint monitoring with the security agencies, the government also have their own. When we give a station product, even in Lagos, we have to go back to monitor that the product is sold, this is why the fuel queue disappeared. When we give a station product when there is no fuel crisis, we expect you to sell that product, when we come to your station and we cannot find the product there, you would be fired.
Adulteration of products by your members
This is not possible again because they cannot use water to adulterate any product, the diesel that they would have used to adulterate petrol is now sold for N210 per litre, the kerosene that they would have used to adulterate is N185 per liter, so, nobody can even try adulteration , whatever product you buy from any station, believe me, that is how they got it from the depot.
How about under-dispensing and hoarding among some of your members
That was before, when we were shouting that DAPMA and MOMAN were selling to us above government's price; this was when people were selling above pump price and under-dispensing. But now, a litre is a litre everywhere, you can go round the filling stations to confirm, it was the abnormal situation that caused it, but now that things are normal, if you don’t bring your pump price down to normal, customers will not patronise you again, you would be killing your station by yourself.
2000 filling stations have been marked for demolition by Lagos government, what's your reaction?
We have issues with Lagos State Government over this, they wrote letter to some of our marketers that they should bring their document, and we made them understand that all these stations they are talking about did not just spring up overnight by themselves, before you can set up a filling station, you must have DPR permit, you will get approval to construct from the Lagos State Government. Let the state government forget about existing filling stations, the association would not watch while they demolish any station, when they demolish anyone we would go on strike, so if they feel that some station do not meet-up with government requirements, they should call the association, we would now call that our member to order, he would give us the document, we would balance the assessment and life continues. Also, if anybody wants to set up a station, they should be mandated to follow due process, the commissioner in power today might not be there tomorrow, he would not know the arrangement on ground. We are saying that the number of filling stations on ground is not enough and government is talking about demolishing some, are they looking for more crisis in the country.
What are your suggestions to the bad roads in Apapa?
We have had series of meetings in the past on that bad road, the Federal Ministry of Power, Works and Housing formed a committee that comprises of all marketers and we advised them to go and do something fast, and in order not to affect the country because there are depots along that road as well as factories, we don't mind if government would construct a flyover bridge along the road, but pending the time they finish rehabilitation of whatever they want to do, we have some depots that are not affected by the bad road, they should divert the product to tank farms constructed along Abule Ado, Kirikiri area, trucks would go in there to load products pending the time that the government would finish the road construction.
The ultimatum issued last week to tanker drivers by army to vacate Apapa Bridge, is it implementable?
All the trucks you see there are coming from outside Lagos from places like Kaduna, Maiduguri among others, and it is not all the depots that have truck parks, anybody that has a tank farm is supposed to have a designated truck park where customers would have to stay, the truck park might be in Mowe or any other place outside Lagos. There is need to decongest the Apapa area; when it is not your turn to load product, you don't necessarily have to come to Lagos, let every depot go and look for a vacant place to serve as truck park , this would reduce the rate at which trucks park on the bridges.
Do you think relocating tank farms from Apapa is the answer?
The tank farms can be left alone as they are, the only problem we have is parking space, government should look at the capacity of the depots and direct them to go and acquire a parking space elsewhere, if all the depot should have their own parking spaces, all the trucks you see long the Apapa road would not be there.