The National President of the Independent Petroleum Marketers Association of Nigeria, Abubakar Maigandi, speaks with IMOLEAYO OYEDEYI about its recent dispute with the Nigerian National Petroleum Corporation Limited and how the full deregulation of the downstream sector would affect fuel availability and affordability in the country
Whatis the current situation regarding your dispute with the Nigerian National Petroleum Corporation Limited over fuel supply?
There has been some improvement in the discussions. On Thursday, we met with the Director-General of the Department of State Security, Adeola Oluwatosin Ajayi, who stepped in to mediate the dispute. He instructed the NNPCL to ensure that we get our product directly from Dangote. He told them to either supply the products to our marketers or return the money they owe us, so that we can purchase the fuel from the Dangote Refinery.
How much does the NNPCL owe IPMAN?
It is over N15bn. We paid them some weeks ago to supply us with the products. You know, for the company, you have to pay upfront before they give you the product, and that was what we did. However, they did not supply the product. Instead, they increased the price and set a different rate for our marketers. For instance, in the Lagos area, they set it at N1,010 per litre. Afterwards, they informed us that due to the price increase, we would have to make additional payments before we could load the product.
But some of your members reportedly threatened to shut down if the NNPCL fails to change its position.
No, we didn’t say we would shut down our services. The only thing we’ve done is to give them certain conditions, stating that they should either supply us with the products or return our money to our respective banks so we can secure a direct allocation through Dangote.
Before now, what prevented your members from directly sourcing fuel from the Dangote refinery?
It’s because the NNPCL has been the sole buyer all this time. However, the situation is about to change, as the DSS Director-General has issued directives to that effect. Once we begin receiving the product directly from the source, Nigerians will certainly see a reduction in price, and the product will also become more readily available.
Does that mean that currently, none of your members are getting products from the NNPCL?
Yes, that has been the case since the price increase. However, a directive has already been given, and we expect to start loading on Friday, as we already have money with them. Our plan is to first exhaust all the money we have with them and then proceed to purchase directly from Dangote. The Nigerian Midstream and Downstream Petroleum Regulatory Authority, has assured us that we will be granted a licence to load through Dangote.
How soon will direct loading from Dangote Refinery commence?
Let’s see what happens today. I believe we will start by either Monday or Tuesday. But we want to first load through the NNPCL because, as I mentioned earlier, our money is with them. We will start with them to help alleviate the ongoing fuel scarcity in various parts of the country.
Are you confirming that from either Monday or Tuesday, you will start loading fuel directly from Dangote?
That’s what we are expecting if everything goes as planned.
Has the NNPCL indicated any readiness for your members to start fuel loading on Friday?
Yes, because as of Thursday night, we were discussing the price with them, and we reached a certain stage in the negotiation. We are now waiting for them to make a final decision. So, I am expecting their call.
What was your agreement with the NNPCL during Thursday’s negotiation?
Regarding the agreements, they reduced the price slightly. They also promised to allow us to load all our tickets. Once we finish loading, we can sit down with them again for subsequent deals. They said they would open the portal on Friday, so that we, the marketers, can complete the payment. Based on the agreement, we are expected to start loading on Friday. We agreed that they would open their portal, while we would begin to make the balance payments for the increment.
As of 4 pm on Friday, was the portal opened?
No, it hadn’t been opened, though I haven’t checked recently.
If they don’t reduce the fuel price, what will be your next course of action?
Our next step will be to exhaust all the money we have with them. However, I believe they will reduce the price because they are aware of the realities on the ground. An instruction has already been given, so they have to comply.
Do you mean the DSS Director-General’s instruction?
Yes.
What percentage of reduction in price are you expecting?
Well, I can only provide a figure when the reduction occurs.
Does it mean that none of your members currently have fuel?
Not entirely. We have a small stock, but it’s not enough to meet the country’s demand. That’s why there’s a scarcity of the product.
What do you believe will be the effects of the complete deregulation of the market, which is currently underway?
It won’t have any negative effects. If the sector is fully deregulated, the price might be a little higher at the start, but it will eventually decrease.
Are you suggesting that full deregulation will have a positive impact on the country, particularly concerning fuel scarcity?
Since the government has stated it can no longer bear the burden, what other option do we have? There’s no choice but to follow the government’s decision. Whether deregulation will make fuel cheaper and more available depends on how it’s implemented. For instance, if Dangote has enough crude supply and the remaining refineries start operating, deregulation won’t have a significant negative impact, especially with the way the Compressed Natural Gas initiative is progressing.
On the crude-for-naira deal, the Federal Government said it had commenced with Dangote…
(Cuts in) Yes, it has started, and that’s why the NNPCL is now buying with naira. We also plan to start purchasing the product in naira from the refinery. This could potentially lower the price of fuel in the country since they’re no longer buying in dollars. My advice to Nigerians is to remain patient because this is not a worrying issue.
