The National President of the Independent Marketers Association of Nigeria (IPMAN), Abubakar Garima, has raised concerns over the Nigerian National Petroleum Company Limited’s (NNPCL) pricing strategy, revealing that the oil company is asking petroleum marketers to buy fuel from its depot in Lagos at N1,010 per litre.
Garima noted that this price is significantly higher than the rate at which NNPCL acquired the product from the Dangote Refinery.
According to Garima, NNPCL purchased petrol from the Dangote Refinery at a price range of N800 to N900 per litre but is now asking marketers to sell it at inflated rates.
He stated, “They are telling us now to buy this product from them at the price of N1,010 per litre in Lagos, N1,045 in Calabar, N1,050 in Port Harcourt, and N1,040 in Warri.”
Garima made these remarks during an appearance on Channels TV’s Sunrise Daily on Thursday, following a widespread outcry over recent petrol price hikes across the country.
On Wednesday, NNPCL retail stations raised petrol prices to N1,030 per litre in Abuja, up from N897 per litre, while in Lagos, prices increased from N868 per litre to N998. Similar hikes were seen in other locations, sparking anger among Nigerians.
This latest increase is the second in just one month, marking a 14.8% or N133 jump in prices. In less than 17 months of the current administration, petrol prices have surged by over 430% since the government took office on May 29, 2023.
Despite expectations for cheaper fuel prices after the adoption of the naira-for-crude policy, Garima attributed the price hike to the deregulation of the sector.
“Well, we know now that we cannot call it an increase, but rather, we can call the removal of subsidy deregulation. Now, deregulation has started taking place fully,” he explained.
Garima further highlighted the challenges faced by independent marketers, particularly an outstanding debt owed by NNPCL. He explained that NNPCL acquired the product from Dangote Refinery at a lower rate, but is now asking marketers to pay above this price.
“We have booked products through the NNPCL, and suddenly, when they decided to increase the price, they are now asking us to add more money to buy above what Dangote is selling to them,” Garima said.
“We have informed them to return our money to our banks so that we can go directly to Dangote for our supply. Presently, our money is with them, for about three months.”
Garima revealed that marketers purchase products from NNPCL before loading, as NNPCL does not sell on credit. However, following the price hike, they have requested a refund so they can buy directly from Dangote Refinery at a cheaper rate.
“We have requested that they sell to us at Dangote’s price or return our money,” he stated. This issue has contributed to the current scarcity of petrol in the country, according to Garima.
The IPMAN President also called attention to the profitability margin NNPCL enjoys from these transactions.
“Dangote is selling to them around N800 to N900 and we are asking that it should be sold at that same price. We can decide to sell at a lower price of N1,020 or N1,010,” he explained.
He accused NNPCL of attempting to sell the product to marketers at a higher price than what they offer at their own retail stations, resulting in a profit margin of over N100 per litre.
Garima further stressed the need for marketers to be fully engaged in the business of petrol distribution and its components. He stated,
“The NNPCL has been the one bringing in the product and loading and has an offtake in Dangote Refinery. We are now being allowed to import, and there is no challenge on that issue. What we are after is to get the product directly from Dangote and not through NNPCL.”
Concluding his remarks, Garima disclosed that NNPCL owes marketers up to N15 billion and emphasized the importance of resolving these financial issues to enable smooth business operations.