Ninety percent of depots operated by independent oil marketers are currently closed on the back of a lack of supplies caused by currency volatility and difficulties in the local distribution channel, industry operators say.

Mohammad Salaudeen, Executive Director of Northwest Petroleum and Gas Limited, said marketers licensed to import petrol since deregulation couldn’t because of the cost of operations.

Representing Winifred Akpani, MD/CEO of the firm, on a panel session titled “Africa Fuels’ Update: Overview of Trends and Market Developments,” at the ongoing Oil Trading and Logistics (OTL) Africa Week 2023 in Lagos, Salaudeen said operations from importation to distribution to the end users have been hampered by the unstable dollar/naira exchange rate, leading to a high cost of operations.

“We’ve seen the Nigerian National Petroleum Company (NNPC) Limited retail stations not operating at some point. If NNPC stations (that are the big boys) are not operating, what happens to people like us?

“The challenge today is that, firstly, we can’t import the product,” he said. “Secondly, the NNPC brings it in in smaller volumes. So what will get to us…We’ll have to wait.”

According to the executive director, when marketers put forth their request, it’s like they are in a queue, “when it gets to your turn, you’ll get it. That is the challenge of today.”

“Unfortunately, we have to wait for quite some time for us to be able to move forward on this and that’s the position that marketers face.”

Earlier at the event, Farouk Ahmed, Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory NMDPRA, said that eight (8) wholesale petroleum product suppliers out of 94 licensed oil marketers were granted import permissions and supplied eight cargoes of PMS totaling 251,000 MT (291,238,670.69 litres) between June and September 2023.

However, he expressed confidence that the government’s efforts to restore the stability of the harmonised FX market will assist in the importation of Premium Motor Spirit (PMS), also known as petrol, by other oil marketing companies in addition to the state-owned oil companies.

On the other hand, the 21 depots operated by the state-owned oil company are not functioning, according to the Independent Petroleum Marketers Association of Nigeria (IPMAN).

“Without mincing words, none of the depots is working,” said Dele Tajudeen, Zonal Chairman, IPMAN Southwest.

Representing Chinedu Okoronkwo, National President of the Association, Tajudeen said the only option left is to explore private depots across the country.

“Once these depots start working, a marketer in Kaduna won’t have to come to Lagos to move products.

“When all these are put in place, the traffic and the cost of transportation will be better,” he said. “By the time we are in serious full deregulation… The price of the commodity will surely come down.”

Businessday