NOGASA: Importation, High Dollar Charges Raising Fuel Prices, Worsening Scarcity

•Says local refining will crash prices

Emmanuel Addeh in Abuja

The Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) an umbrella body of suppliers, stakeholders and practitioners in the nation’s oil and gas  distribution service chain, yesterday insisted that the importation of petrol as well as dollar charges in the industry were causing high prices and scarcity.

Speaking in an interview with journalists in Abuja, National President of the body, Bennett Korie, stressed that local refining will reduce pump prices markedly and enhance product availability.

“We are selling over the regulated price because before now, it was from refineries in the country, but now we get it from the depots, whether private or from the Nigerian National Petroleum Company Limited (NNPC),” he argued.

According to him, because the product is imported, it would need to be offloaded into smaller vessels, thereby costing as much as  $85,000 per day to bring it to the depots from the foreign vessels. “All these are paid in dollars,” he added.

He pointed out that while the NNPC may be selling from a N148 depot price, the calculation from the depots to the filling stations also constitute an additional cost which will be borne by the consumers.

The NOGASA chief stated that if the association downs tools because of the high price and additional charges, the entire country will suffer, prompting it to add the costs incurred, noting thats it’s members were owing banks.

Korie also blamed the bad roads nationwide for some of the challenges of product supply, stressing that big potholes on the roads were destroying vehicles owned by members of the association. “If you fix these roads, it will help this so-called dollar problem that we have, because that contributes 95 per cent of the costs that we bear,” he added.

According to him, stakeholders like the Nigerian Maritime Administration and Safety Agency (NIMASA), the Nigerian Ports Authority (NPA), among others collect charges in dollars, thereby skyrocketing the prices Nigerians get the product. “Everybody keeps blaming the marketers. How do you buy a product for N150 and then spend N70 to bring it to the filling stations,” he queried.

However, he stated that there are assurances from the Minister of State, Petroleum Resources, Timipre Sylva as well as from the NNPC that by January one of the refineries in the country will begin operation, thereby cutting off some of the costs.

“Before now, you go to a refinery and load, but now you pay for vessels for 10 days to go and load offshore and it will spend 14 days, for something that’s supposed to spend one day. Who pays for that?

“We are suffering. But somebody asked that if we are suffering, why do we  continue in business. But I say we are contributing our own quota. We are sacrificing ourselves doing this business.

“ How many depots have fuel? Which bank will take that risk? So, we are suffering to help Nigerians,” he posited.

With all the associated costs borne by the marketers, he stated that the landing cost should not be less than N280, stressing that it’s not a pricing problem, but a distribution issue.

He explained that the reason independent marketers may be selling higher than the major marketers is because the latter get directly from the NNPC, while independent marketers pass through long processes to get the product, including buying from the key marketers.

He argued that although the intervention of the Department of State Service (DSS) which issued the stakeholders a 48-hour ultimatum to make products available recently, helped, it has not succeeded in eliminating the expenses incurred by the marketers.

“ Again, the major cost is diesel. This is because we use diesel or AGO to carry the petrol. The ships also use diesel. The depots use diesel. The filling stations use diesel to operate their facilities.

“So, it’s very clear that until you fix diesel supply and cost, things will not change. If you bring it back to N170, the way it used to be, we can even sell for you at N100 or N90 because the diesel is cheap. So, if they want to do subsidy, let them do it on AGO, not petrol,” he posited.

Korie stated that as it works on its transition, the NNPC was also encountering delays in its processes, further compounding the problem.

He argued that prices continue to fluctuate, stressing that Nigerians should be happy that the product was being subsidised, because the cost of repair of the vehicles used by the marketers because of bad roads was adding to the cost of doing business.

He further added that the 60,000 barrels local production expected soon will generate several products including jet AI, noting that it will affect prices of flights to the benefit of Nigerians.