Potential fuel shortage threatens Nigeria as petrol prices skyrocket to over N1,000 per litre
The severe shortage of Premium Motor Spirit (PMS), commonly known as petrol, has been affecting the Federal Capital Territory (FCT) for over a month now. However, the situation worsened over the weekend and has now spread across the country. Fuel queues have become more prevalent than ever before, and in certain areas, the product is being sold for over N1,000 per litre.
There was a shortage that caused a disturbance in business and social activities over the weekend in Abuja and the major cities of Lagos, Kaduna, Kano, Port Harcourt, Niger, Nasarawa, and other states.
A significant number of filling stations have closed down because of a severe shortage of PMS.
The Nigerian National Petroleum Company Limited (NNPCL) previously attributed the shortages to “distribution” challenges, but did not provide details on the specific cause of the recent prolonged spike in Abuja and surrounding areas.
However, NNPC has refuted allegations that it owes $6.8 billion to international oil traders and that it has not been remitting revenues to the Federation Account since January.
In various areas of Abuja, a 10-litre container of petrol was being sold for as high as N12,000 on the black market. Meanwhile, private filling station owners were selling petrol for prices ranging from N700 to N1,050 per litre, depending on the location. Nevertheless, the NNPC mega stations in Abuja continued to sell at a price of N617, despite the long queues that extended for several kilometers.
The situation resulted in a significant increase in transport fares, with rates doubling in many routes within Abuja.
The situation was consistent, whether it was the NNPC mega station on the Gwarimpa axis of the Zuba-Kubwa Expressway, the Conoil and Total filling stations across from the national oil company’s headquarters in the Abuja city centre, or the Salbas filling station at the Dei-Dei end of the Zuba-Kubwa expressway.
In Zone 1, the NNPC mega station on Olusegun Obasanjo Way was open, and the one opposite GSM village also had the product, but there were very long queues. Other stations in the vicinity, such as Total filling station, were unable to provide the product. When THISDAY visited, the NNPC filling station in Mabushi was not open to the public.
During an interview on Arise Television over the weekend, Abubakar Maigandi, the president of Independent Petroleum Marketers Association of Nigeria (IPMAN), attributed the situation to the phenomenon of “panic buying.”
According to Maigandi, there was a protest that lasted nearly a week, resulting in many depots not being able to load. During the protest, we instructed our marketers to quickly sell their products within 24 hours to avoid any negative impact on petrol purchases.
They quickly ended the call, and we hurried to the location where we needed to load the product. We have now begun the loading process. A few trucks are already en route, but we are currently facing some difficulties.
“The vessels transporting the product to the tank farm encountered delays caused by the rain, but the issue has been resolved.”
Maigandi informed THISDAY about the struggles his members faced due to the shortage in supply. According to him, petrol is the primary product that sustains their business.
Maigandi stated that NNPCL had not provided them with clear information regarding the issue, other than mentioning logistics claims.
In Lagos, there is a significant petrol scarcity issue. Many major filling stations are closed, and the few that are open are overwhelmed with long queues of vehicles and people along the main roads.
According to some marketers interviewed by THISDAY, the ongoing scarcity is being attributed to substantial subsidy payments, despite President Bola Tinubu and his team’s repeated assertion that subsidy has been eliminated from the petrol marketing equation in Nigeria.
The marketers stated that they had no choice but to close their filling stations due to the unavailability of the product. According to them, Tinubu was the only one with the solution to the scarcity, not NNPCL. NNPCL had taken on the role of being the sole importer of petrol and bearing the risk for the government.
It was noticed that on Awolowo Road in Ikoyi, Lagos, only the two NNPC mega stations were selling the product. However, there were long queues of motorists and buyers with jerry cans, which led to heavy traffic congestion on the busy road.
The Total filling station on Mobolaji Bank Anthony Way in Ikeja was not operational, while the Northwest filling stations at Maryland Bus Stop were open. However, there were long queues resulting in traffic congestion on Ikorodu Road towards Palmgroove.
The Conoil filling station in Ikeja, across from LASUTH, was closed and not available for business.
As of Sunday, only Pinnacle filling station was open at the Cele-Okota axis. Unfortunately, nearby stations like Conoil, Rainoil, Emadeb, Total, and MRS were closed.
Similarly, in Gbagada, located at the foot of the Third Mainland Bridge, only Northwest Petroleum was open for business. However, there were long queues and heavy traffic congestion on the road.
In Surulere, the situation was similar, with many filling stations either closed or operating on a limited basis, resulting in long queues.
During the shortage on Sunday, NNPC sold fuel at prices ranging from N650 to N700 per litre at its stations in Lagos. However, private marketers that were open sold their products for prices ranging from N750 to N900. Illegal sellers, who use containers, were charging prices ranging from N1,500 to N2,500 per litre, depending on the location and urgency of the buyer.
Some marketers, who spoke with THISDAY anonymously, expressed frustration and attributed the ongoing fuel supply challenge to subsidy.
A marketer, claiming to be a member of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), expressed concerns that the issue would persist as long as there is subsidy and the government fails to take responsibility and resolve it permanently.
He asked, “What do you believe is the issue?” This is a subsidy. There is a significant amount of subsidy in the system, although the government consistently denies this fact. Have you looked into the prices of gasoline in other countries? Marketers are not likely to purchase or sell products below their cost price. Only NNPC has the ability to import and sell products below their landing cost due to its government affiliation. This advantage stems from NNPC being the sole recipient of dollars at the official rate. That advantage is unique to our marketer.
“We have repeatedly emphasized that subsidies are not sustainable.” It’s causing the issues we’re currently experiencing. Due to its detrimental effects on competition and investor confidence. Corruption and lack of transparency are generated by it. If subsidies on petrol are completely removed, scarcity will no longer be an issue. It will now be based on the principle of a willing buyer and a willing seller.
It is my opinion that individuals should refrain from criticizing NNPC and holding them responsible. They are not responsible for it. The government dictates how they want the system to be run. The government has designated NNPC as the exclusive importer of petrol and responsible for bearing its associated risks. Every chief executive of the NNPC must adhere to the president’s directives.
An executive at 11Plc, the company that owns Mobil filling stations, informed THISDAY that their stock had been depleted and they were awaiting a fresh supply from NNPC.
Across local government areas and communities in Rivers State, our investigation has revealed a significant increase in the price of petrol. A litre of petrol has surged from N700 to between N880 and N900.
Several major marketers, such as Oando and Conoil, sold their products at N900, while independent marketers offered prices ranging from N870 to N888. NNPC sold fuel at a price of N591 per litre, unfortunately resulting in long queues.
During visits to various filling stations, it was observed that Stip International Global Venture, Jiang oil and gas, located along NTA Road, Ozuoba, sold fuel at a price of N880 per litre. Similarly, Oando in old Port Harcourt Township and Conoil at Education Bus Stop in Diobu axis of Port Harcourt sold fuel at a price of N900 per litre.
Chikweri Petroleum and Giccel Limited in Ogbogoro, Obio/Akpor, are selling at prices of N880 and N900, respectively. The Izumba Filling Station is located on Rukpokwu by C4i checkpoint, while Hydropet is situated along Eliporanwa in Rumuolumeni. Both are available for purchase at the price of N900.
The Filling station at Igwurita sold the product for N888 per litre, Eterna Filling station at Rumuokwuta sold it for N870, while NNPC on Aba Road by Road Safety office sold it for N591 per litre.
Petrol prices in Kaduna State vary between N760 and N950 per litre at different filling stations, depending on their sources of supply.
At Omosco filling station, which is situated along Yakowa Way in Kaduna, the price of petrol is N950 per litre. However, at Rain Oil, located at Refinery junction, Kaduna, and Mobil filling station, situated along Warf Road, Kaduna, the cost ranges from N880 to N760.
Several NNPC mega stations in the area, including those near Marraban Rido, Indomie factory, Barnawa near Living Faith Church, and Ali Akilu Way, among others, were found to be out of stock.
Transport fares in Kaduna increased due to the rise in petrol prices. Prices for fares from locations such as Sabon Tasha, Gonin-Gora, Narayi, and Kakuri, as well as other areas within the metropolis, have increased from N250-N300 to N400-N500 for a trip to the Central Market.
In Kano, a similar situation unfolded, as motorists faced long queues and struggled to purchase petrol, which was priced at over N800 per litre.
It was found that both independent and major marketers in Kano had closed their outlets for the entire week. Many drivers lined up at Total filling stations along BUK and Zoo road, purchasing fuel for N889 per litre.
There were significant lines at Aliko filling stations along Maiduguri road, Zaria road, and BUK road, as drivers patiently waited to purchase fuel priced at N750 per litre, which was considered the most affordable compared to other stations.
NNPC sold the product at a price of N617 per litre, however, there were significantly long queues.
Nevertheless, many filling stations, especially those on the outskirts of Kano, exploited the fuel shortage and high demand by imposing excessive prices, reaching as high as N1,000 per litre.
NNPC has attributed the current product shortage to evacuation challenges and has assured that it will be resolved by midweek.
In response to THISDAY’s inquiry, the Chief Corporate Communications Officer of NNPC, Mr Femi Soneye, stated that there are currently some evacuation challenges in Lagos, but they are expected to be resolved by midweek.
In a brief statement released later, Shoneye expressed NNPC’s regret over the fuel supply shortages, attributing them to distribution challenges.
He advised drivers to avoid panic purchasing, as the company was collaborating with relevant parties to address the issue.
The NNPC expresses regret for the fuel supply issues experienced in certain areas of Lagos and the FCT. These challenges are due to distribution difficulties. The company is encouraging motorists to avoid panic buying and assures them that it is actively collaborating with relevant stakeholders to restore normalcy.
Additionally, on Sunday, NNPC refuted reports claiming that the company owed $6.8 billion to international oil traders and had not paid revenues to the Federation Account this year.
Soneye clarified that NNPC Ltd. does not owe $6.8 billion to any international trader(s). In the oil trading industry, transactions are typically conducted on credit, which means it is common to have outstanding debts at some point.
“However, NNPC Ltd., with the assistance of its subsidiary, NNPC Trading, has numerous trade credit lines available from various traders.” The company pays its related invoices in the order they are received, following a first-in-first-out (FIFO) approach.
“Contrary to the claim, NNPC Ltd. has indeed remitted funds to the Federation Account since January.” NNPC and its subsidiaries consistently remit their taxes to the Federal Inland Revenue Service (FIRS). In addition to making payments of Company Income Tax (CIT) to road contractors, the Road Investment Tax Credit Scheme is also implemented.
“NNPC Ltd. is the largest contributor to the tax revenue shared every month at the Federation Account Allocation Committee (FAAC).”
Regarding the matter of “quality/quantity fiscalisation” of imported petroleum products, the NNPC clarified that it does not have any regulatory authority and therefore has no involvement in the process.
Soneye clarified that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is an independent regulatory agency responsible for such matters, and it does not report to the NNPC.
According to him, NNPC is open to media inquiries about its operations and is willing to provide accurate information through print or electronic channels.
He said, “This aligns with the company’s commitment to transparency, accountability, and performance excellence, which has been emphasized by the management led by Mele Kyari since 2019.”