The Independent Petroleum Marketers Association of Nigeria (IPMAN) claims that the landing cost per litre of Premium Motor Spirit (PMS), often known as petrol, has made it impossible for petrol marketers to import the critical commodity, as the Nigerian National Petroleum Company (NNPC) Limited does.
IPMAN National Operations Controller, Zarama Mustapha, said on Channels Television’s Sunrise Daily programme on Thursday: “Right now, the landing cost of PMS is over ₦1,200, without the margin of the marketers, transportation and other logistics,” “NNPC sells to marketers at ₦565 or so. That means there is a subsidy of almost ₦600 to ₦700 as of now.
“Whether they (government officials) say there is subsidy or there is not subsidy, the fact on the ground clearly states that there is something they are under-recovering.”
On of the of the very clear demands of #EndBadGovernance demonstrators who took to the streets last week to protest hunger and food inflation in Nigeria was the return of petrol subsidy.
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However, during a nationwide broadcast on Sunday, President Bola Tinubu said he “took the painful yet necessary decision to remove fuel subsidies and abolish multiple foreign exchange systems which had constituted a noose around the economic jugular of our Nation and impeded our economic development and progress”.
Reacting, the IPMAN official said the demands of the young protesters were legitimate but expressed doubts if the government could afford to such.
“Their demands are cogent, and in consistent with the realities on the ground, looking at the economic situation of the country. They have every right to go and demand that. But the other side of it is that government can do what it can be able to afford.
“If you say we should revert to ₦200 or ₦250, can the government afford that much of a burden? The government has found itself in a very difficult situation.
“There is a need for us to understand and see how best we can be patient enough and get out of this situation, the situation is very complex; not the way the general populace looks at it, government is in a very tight corner right now,” Mustapha said.
Nigeria, Africa’s most populous country, is facing energy issues, with all of its state-owned refineries inoperable. The country relies significantly on imported refined petroleum products, with the state-owned NNPC being the primary importer of these critical commodities.
Fuel queues are widespread throughout the country. Since the elimination of subsidies in May 2023, petrol prices have tripled from roughly ₦200/litre to about ₦700/litre. This has compounded the woes of citizens who use petrol to power their vehicles and generate sets, because to the decades-long epileptic energy supply.
The government unified forex windows, causing the naira’s value to plummet from $1/₦700 to over $1/₦1600 on parallel markets. Prices for food and essential necessities skyrocketed as Nigerians faced inflation.
The IPMAN official blamed policy inconsistencies for the country’s regular petrol lineups, claiming that FX volatility has driven nearly half of independent marketers out of business.
He stated that fuel marketers spend more than three times the amount they used to spend on a single tanker before the subsidy was removed.
Mustapha said, “Looking at the need to be in business in the deregulation era, more than 50 or 60% of our members are almost out of business because of the capital involved. Once you cannot get the capital involved, you cannot sustain the business.
“For most of our members, what they used to buy one truck, they need about five or six times that value of capital to buy one truck today. Once you cannot get the capital involved, you cannot sustain the business.”
The IPMAN official also reacted to the directive by the President that the NNPCL sell crude to Dangote Refinery and modular refineries in naira.
He said: “It’s just the currency but whatever they are going to sell in naira is going to be calculated based on the FX rate.
“The point is that it will reduce the demand on the pressure on the naira. Naira will be chasing the dollar, obviously. So, the volume of demand of dollars is going to drastically reduce which will give some kind of value and appreciation to our currency.”
