Fuel Scarcity: NMDPRA Vows to Sanction Filling Stations Rejecting Use of PoS Machines

*Ijegun-Egba tank farm owners step up product distribution in compliance with N172/litre ex-depot price

Emmanuel Addeh in Abuja and Peter Uzoho in Lagos

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) yesterday vowed to sanction any petrol retailer that has formed the habit of rejecting the use of point of sale (PoS) machines for payment for services rendered to customers.
Also, in continuation of the joint effort by stakeholders in the petrol supply and distribution system to ease the lingering scarcity and queues at filling stations, depot operators in Lagos under the aegis of Ijegun-Egba Tank Farm Owners Association have stepped up the distribution of the product across the country from their depots.

In a statement signed by the General Manager, Corporate Communications & Stakeholders Management, NMDPRA, Mr. Kimchi Apollo, the organisation said it was unacceptable that at a time everybody should be working to ameliorate the impact of the cash crunch, many retailers were drawing back the hand of government by rejecting the use of PoS.

It stated henceforth, in collaboration with security agencies, the NMDPRA would be at the fuel dispensing stations to ensure that none of its rules were flouted, including the use of electronic means of payment.
“It has come to the attention of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) that some retail outlets are not accepting the use of Point of Sale (POS) machines at their filling stations due to the recent cash crunch brought about by the new Naira design.
“The Authority frowns upon this recent behaviour which is causing untold hardship for Nigerians at a time when all hands should be on deck to assist the government in the transition to the new Naira,” the downstream regulator stated.

It therefore directed that any operator that refuse to abide by the extant rules would be punished, and reassured the public of its readiness to ensure the availability of products nationwide.
“All retail outlets are directed to ensure the free use of POS and bank transfer for the sale of petroleum products to alleviate the suffering of customers at this critical time.
“The Authority and security agencies will be at retail outlets to ensure compliance with this directive and any filling station found violating this directive will be duly sanctioned.

“We reassure the general public of our commitment to ensuring good quality service in the sale and distribution of petroleum products nationwide,” it added.
Nigeria has been under the burden of unprecedented shortages of petrol supply since February 2022 when adulterated petrol was imported into the country and has since graduated into one of the most prolonged scarcity situations in the country’s history.
The authorities had adduced several reasons for the erratic petrol supply in the country, including the Sallah festivities at some point, bad roads and rising handling charges, among others for its inability to make the products available at the pumps.

Meanwhile, in continuation of the joint effort of stakeholders in the petrol supply and distribution system to ease the lingering scarcity and queues at filling stations, depot operators in Lagos under the aegis of Ijegun-Egba Tank Farm Owners Association have stepped up the distribution of the product across the country from their depots.
The Chairman of the association and Chief Executive Officer of Emadeb Energy Limited, Mr. Debo Olujimi, told journalists yesterday in Lagos, during an inspection tour of the tank farms in Ijegun-Egba, by a team from the NMDPRA that their members had started complying with the government’s approved N172 per litre ex-depot petrol price.

Also, the NMDPRA said it had ramped up enforcement and monitoring of petrol distribution system to ensure that all the operators play by the rules as part of the mandates of the federal government’s committee on monitoring of petroleum products distribution.
Olujimi, who confirmed that there was enough petrol available to its members as the Nigerian National Petroleum Company Limited (NNPC) had supplied them 150 million litres of the product for February, added that his members had started trucking products to various locations they serve.
Some of the depots visited were: Emadeb Energy, A.A. Rano, Rainoil and Menj Oil.
He confirmed that NNPC had been consistent in supplying petrol to them, assuring Nigerians that respite had come their way with the product now available for dispatch to them.

The NNPC had on Sunday announced that it had evacuated 450.92 million litres of petrol to marketing companies for last week, adding that for the week, the average daily evacuation stood at 64 million litres while year-to-date average daily evacuation was 63 million litres.
The state oil company had insisted that Nigeria was not dealing with supply problem, but distribution problem, maintaining that NNPC has huge volume of products both onshore and offshore that could serve the nation for nearly 30 days.
However, the petrol scarcity has taken different dimensions, ranging from the pump price rising from the initial government approved price of N165 per litre to N185, and to between N250 and N650 per litre, depending on the location.

In addition, the fuel crisis has resulted to many motorists now having to stay on fuel queues for hours, while black marketers and greedy marketing companies cashing in on the problem caused by the distortion of the petrol market to the detriment of poor Nigerians.
But with the improvement in supply from NNPC to depot owners, the Ijegun depot owners’ chairman assured Lagos residents that distribution to filling stations would improve and scarcity eased in few days time.

Olujimi said, “The mission here today is actually for the regulators and Nigerians to know that PMS which is the only product that Nigerians have been suffering from in the last few months is fully available and is sold at the government-regulated price in all the depots in Ijegun.
“On a monthly basis, what we’ve been receiving so far, we just want to talk about the consistency of supply from the NNPC, which is a very key factor here. As at date, NNPC for the month of February, has given Ijegun over 150 million litres.

“So, you can see the vessels discharging at the jetty and we’re telling Nigerians that we’re confirming it to everybody that this product is coming out from here at the government-regulated price and that Nigerians can trust us, trust this business here.
 “And that going forward, we expect that the product will be sold at the retail end of the business at affordable prices which government has fixed for each and every area where Nigerians can get the product at the right pump price and in all the filling stations across the country.”

Going forward, he warned that any depot in Ijegun found wanting of selling product more than N172 to all the retailers would be sanctioned.

The association’s chairman pointed out that Ijegun depot owners control about 33 to 35 per cent of the entire national petrol distribution, reassuring Nigerians that the 150 million coming from the location would be distributed across the country at the right regulatory price.

However, commenting on the challenge of the outrageous amount they pay to hire daughter vessels for lightering of product from NNPC’s mother vessels on the high sea, Olujimi described the situation as tough for them.

According to him, “This price as at the beginning of last year was about $21,000 to $24,000 a day and suddenly, due to the Russia-Ukraine War, everything around the world fully skyrocketed. So, at some point in time, depot owners and other marketers had to pay $85,000 a day and if you calculate that, that’s about $850, 000 for 10 days.

“And in some cases where you have to probably go into demurrage and all that, you pay almost $1.2 million. And some of the agencies including NPA, NIMASA, the fees are charged in USD. So, it’s part of the problem that really occured that drove up the ex-depot price.”

As the prices have reduced, he called on the NNPC to assist them by making more daughter vessels available to them to enable them to further wet the country with fuel.

He added, “And if they make that available, we can actually be rest assured that this product is spread across the country. So, as at the moment, I think the price is about between $60,000 to $65,000 a day, which at the end of the day, is one of the things.

“But as Nigerians and as business people who are reasonable, we don’t want Nigerians to continue to suffer. So, that’s why even at the point where we are today, some of us have taken it upon ourselves to let business continue even if it’s a little margin, we’re satisfied.

“Let business continue. With that, we hope that the government too, will in some way, incentivise us by providing a level playing field where that will allow us into a deregulated market and things can get better.”

In his remarks after the inspection tour, the Regional Coordinator, South-west, NMDPRA, Mr. Ayo Cardoso, said the authority had ramped up enforcement and monitoring of petrol petroleum distribution system to ensure that all the operators play by the rules as part of the new mandates of the federal government’s committee on monitoring of petroleum products supply and distribution.

He said the agency had always monitored the system end-to-end, from all the value chain, right from the arrival of vessels down to the retail points.

However, Cardoso maintained, “we’re ramping up enforcement because of the new regime at every product. You can see that right now, we’re seeing the light at the end of the tunnel. Things are getting better right now.”

According to him, Nigeria now has sufficient fuel in the system and that in few days, everything would  be alright.

The NMDPRA official disclosed that about 580 million litres was in the inland depots while about 690 million litres was in the marine, which culminated to about 1.3 billion litres that could last for 22 days.

“I can say that as at today, the inland depots have about 580 million litres, and in the marine, offshore, you have about 690 million litres as well. So, all in all, both marine and inland depots, you have about 1.3 billion litres.

“So, that shows that we have sufficient fuel, and all these figures translate to about 22 sufficiency days. We know we also have issues with distribution, but they are also being addressed just like the Chairman said earlier on,” Cardoso said.