Depot Owners Unhappy As NNPC Flood Market With Petrol 

 The Minister of Works, Power and Housing, Babatunde Fasola (L) and the Group Managing Director of NNPC, Maikanti Baru at the 4th Quadrennial Delegates Conference of the PTD Branch of NUPENG which held last week in Abuja.

There are indications that downstream operators are not happy with the fact that the Nigerian National Petroleum Corporation (NNPC) was flooding the Nigerian market with petrol as many of them have refused to bring down their ex-depot price in line with the regulation of the Petroleum Products Pricing Regulatory Agency (PPPRA).

NNPC on Tuesday said its downstream subsidiary, the NNPC Retail Limited, now controls up to 14 per cent of the market share of downstream petroleum business in Nigeria.

He noted that it was also poised to establish more mega stations in the country, adding that the corporation was in the process of identifying the areas where such large mega stations would be economically viable when sited.

Findings by Shipping Position Daily last week revealed that even though filling stations were selling at pump price of N140 -N145 per litre, which comply with the retail price band of N135 - N145 set by the PPPRA, most of the depot owners were yet to revert to the N123.28 - N133.28 indicative ex-depot price set by the pricing agency.

It was gathered that apart from the major oil marketers, about 12 other depots had stock of petrol at the weekend.

The major marketers include: Oando Plc, Total Nigeria Plc, Mobil, Forte Oil, Conoil, and MRS.

The major oil marketing companies traditionally sell at N145 per litre at the depots, but to only their dealers, who are also provided with special offers to ensure that they sell at the same N145 per litre in their branded filling stations.

Apart from the major marketers, petrol was also available in about 12 other depots - AA Rano, Chi-Pet, First Royal, Folawiyo, Heyden Petroleum, Integrated Oil and Gas, MRS, Obat, African Tanker, T-Time Pet, and Wosbas.

Also, the ex-depot price was different in many of these depots, where products could be accessed from third party at ex-depot prices of N133.50 - N136.50, compared to the indicative ex-depot price of N123.28 - N133.28 recommended by the PPPRA via the circular with reference number A.4/9/017/C.2/IV/690 of May 11, 2016.

One of the marketers, who spoke under anonymity, blamed the situation on NNPC's role as the sole importer of petrol.

"Marketers are finding it difficult with NNPC as the sole importer, because NNPC buys at a higher cost at the international market than the private marketers. If the private marketers are given the same incentives to import like NNPC, they will buy at cheaper cost and the ex-depot price will come down," he said.

However, despite these price differentials, investigation revealed that some independent marketers even sell below N145 per litre, while the major marketers stick to N145.

The NNPC had flooded the whole country with petrol, forcing the marketers to devise various kinds of incentives to woo customers and prevent glut in the market.

A statement from the NNPC in Abuja last week quoted its Group Managing Director, Dr. Maikanti Baru, to have stated at the fifth Annual General Meeting (AGM) of the retail arm that the outfit commenced operations in August 2002, when its first retail outlet was inaugurated in Lagos to market petroleum products to the public.

It said NNPC's entry into products retailing was initially a strategic move intended to provide the corporation with a vehicle for intervention in the market during periods of emergency and avoidable supply disruptions, serve as benchmark for key players in the distribution chain and ensure safe, orderly and profitable retailing of products in the country and is also a vehicle to achieve NNPC's world class vision by integrating its upstream and downstream businesses in a manner comparable to other national and international oil companies practices.