Financial Energy Review
………..by Ben Ndubuwa…….
Marketers have decried the shutdown of the purchasing portal of the Nigerian National Petroleum Company Limited (NNPC Ltd), a situation leading to round tripping of products supplies and severely impacted the market and driven petroleum products prices up.
However, the Chief Corporate Communications Officer of NNPC Ltd, Olufemi Soneye has given reason for the closure of the purchasing porter to major marketers. He told Financial Energy Review, that the closure was intended to prevent NNPC Ltd, from holding marketers funds for extended period. “We have a significant backlog to address” Soneye said.
A top official of a major oil marketing company who wants to remain anonymous, said that this closure of the purchasing porter by NNPC Ltd has among other things led to their inability to source products direct from the company and consequently forcing them to buy products from third parties.
Other marketers alleged that some of these third party sellers are not licensed or certified oil marketers but are those who are close friends to some NNPC top officials. This, they said has resulted to round tripping of petroleum products supplies, leading to price hike of the products in the open market.
The Marketers said that yesterday Monday marks 99 days since the shutdown of the third quarter of fuel supply, a situation that has severely impacted the market and driven up prices. Previously, marketers were buying fuel at 560 Naira per liter, but prices have since risen significantly, fluctuating around N850 to N1000 per litre at retail.
According to them, with the ongoing shutdown, marketers are now forced to purchase from third-party sources due to the unavailability of direct allocations from the NNPC Ltd. The Independent marketers pointed out that the NNPC Ltd, being the sole importer of fuel into Nigeria, has not been allocating directly to them at the previous rate of 560 Naira per liter. Instead, fuel is being sold to third, fourth, and even fifth parties, leading to increased costs and logistical challenges. As of yesterday, marketers in Rivers State reported buying fuel from these third-party sources at a staggering 1,050 Naira per liter.
According to Dr. Joseph Obele an oil and gas expert who is also a marketer had said that the Independent marketers have been buying from even ‘fifth party’. “The porter have been shut down hence marketers have been buying, you may want to ask how’’ Obele said.
He noted that this supply chain disruption has raised significant concerns among marketers and consumers alike, as prices continue to soar due to the lack of direct access to fuel from the NNPC. The reliance on multiple intermediaries has compounded the issue, inflating prices well beyond the reach of many.
Obele said the ongoing crisis underscores the need for a more transparent and efficient distribution system to stabilize the market and ensure fair pricing for all stakeholders.
However, Soneye has reassured marketers that the porter will be reopened once the backlog has been sufficiently cleared. In response Marketers said that there is an urgent need for intervention from the NNPC and relevant authorities to restore direct allocations to marketers and reduce the dependency on third-party suppliers, which has been a key factor in the escalating fuel prices. The situation they pointed out will remains critical, with no clear resolution in sight if the shutdown is allowed to continue.
