NMDPRA blames marketers, smugglers for lingering petrol scarcity

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) says the petrol scarcity in the country is exacerbated by the activity of cross-border smugglers, erring marketers and ongoing road construction. 

In a statement on Friday, NMDPRA maintained that there is petrol sufficiency of over 1.6 billion litres — both on “land and marine”.

The regulator said the Nigerian National Petroleum Company (NNPC) Limited is committed to supplying more petrol in the coming months at government-regulated prices.

“The current distribution hitch is heightened by activities of cross-border smugglers, who divert PMS meant for Nigerian market to neighbouring countries where PMS prices are significantly higher than Nigeria’s regulated price. We are engaging and collaborating with the Nigeria Customs Service to address this issue,” the statement reads. 

“The price arbitrage between Nigeria and neighbouring countries has continued to grow due to inflation and the regional impact of the Russia-Ukraine conflict on the global energy value chain including international freight rates and coastal vessels charter rates.

“We wish to bring to public knowledge that the ongoing government effort to rehabilitate strategic Nigerian roads ahead of the rainy season has necessitated rerouting of tanker trucks conveying petroleum products to alternative roads, therefore increasing transit time and associated cost of product transportation.”

‘MEASURES IN PLACE TO ADDRESS THE ISSUES’

NMDPRA said key stakeholders have put various measures in place to address the prevailing issues. 

The regulator said one of the measures is a modest adjustment in the cost of product transportation to cater for the impact of high diesel prices on transporters.

Others are the automation of product sales interface, and putting in place a monitoring system — in collaboration with government security agencies — for the distribution of products to retail outlets.

Another approach listed by the regulator is the extension of operating hours at the loading depots and selected filling stations.

“We have reinforced our monitoring teams and appropriate sanctions to checkmate the activities of erring marketers who are distorting our planned product flow to designated outlets in order to profiteer from price arbitrage have been emplaced,” NMDPRA said. 

“As a medium to long term measure, cost-efficient means of transportation, including Autogas conversions and pipeline rehabilitation, are being implemented. This will be complemented by end-to-end process automation across the value chain.

“NMDPRA appreciates the collaborative efforts of some patriotic oil marketing companies who, despite the glaring incentives to engage in illegal price arbitrage, have stood steadfast and operated responsibly within the approved pricing limits.

“We would like to reassure all Nigerians that NMDPRA as a responsible regulatory authority would continue to work passionately to ensure energy security and continuous collaboration with all the relevant stakeholders to restore normalcy in the Premium Motor Spirit supply and distribution network within the shortest possible time.” 

The Independent Petroleum Marketers of Nigeria (IPMAN) had recently informed TheCable that petrol scarcity may persist till mid-2023 when the federal government intends to scrap subsidy. 

The FG recently constituted a 14-member steering committee to facilitate adequate petroleum products supply and distribution management.