Fuel dealers hit FG, blame scarcity on low refining capacity


  • We have 1.5bn litres of petrol, says NNPC, cautions against panic buying
  • Shell paid Nigeria $1.09bn taxes, royalties in 2023

The Independent Petroleum Marketers Association of Nigeria has attributed the current fuel scarcity to the combination of low refining capacity and inconsistent government policies in the petroleum sector.

IPMAN Deputy President, Zarma Mustapha, disclosed this on Tuesday while reacting to the hardship faced by Nigerians with fuel scarcity, with widespread reports of long queues at petrol stations across the country.

Mustapha said the scarcity is a result of the dwindling supply of petroleum products, particularly Premium Motor Spirit, commonly known as petrol.

According to the IPMAN official, the roots of the current fuel scarcity can be traced back to the late ’70s when the Nigerian government established IPMAN and other major marketers to alleviate supply challenges in the petroleum sector.

He said, “Despite efforts to expand refining capacity and build infrastructure such as depots and refineries, the country has failed to keep pace with the growing demand for petroleum products, leading to recurrent shortages. There is a need for continuous investment in refining infrastructure to meet the needs of Nigeria’s burgeoning population and economy.

“Government policies have also played a significant role in exacerbating the fuel scarcity situation. Inconsistencies in pricing regulations, particularly regarding PMS, have deterred private investors from participating in the importation and distribution of petroleum products. While certain products like Automotive Gas Oil (AGO) and kerosene have been deregulated, PMS remains under the control of the NNPCL, further limiting competition and supply chain efficiency.

“Despite efforts by some independent marketers to import petroleum products, the unfavourable foreign exchange rates and high operational costs have rendered such ventures unprofitable. The disparity between the exchange rates at which NNPC imports fuel and the prevailing market rates has discouraged private importation, leaving NNPCL as the primary importer of PMS. As a result, independent marketers like IPMAN are left to rely on NNPC for their supply, impacting their bottom line.”

The IPMAN official, however, urged the Federal Government to review its policies and increase investment in refining capacity to ensure a stable and reliable supply of petroleum products in the country.

“While IPMAN acknowledges the role of market dynamics in determining retail prices, the association emphasizes the importance of consistent supply to meet consumer demand.

“The current situation highlights the urgent need for a comprehensive review of government policies and increased investment in refining capacity to ensure a stable and reliable supply of petroleum products across Nigeria.

“As citizens endure the inconvenience of fuel scarcity once again, stakeholders look to the government for effective solutions to address the underlying issues plaguing the country’s petroleum sector,” he added.

We have 1.5bn litres of petrol, says NNPC, cautions against panic buying

However, the Nigerian National Petroleum Company Limited has assured the general public of the availability of over 1.5 billion litres of petroleum products in stock.

It therefore cautioned against panic buying even as motorists in major cities across the country continue to experience various forms of challenges ranging from price instability or non-availability of Premium Motor Spirit otherwise known as petrol at filling stations.

The company in a statement on Tuesday insisted that there is a remarkable improvement in the distribution of the product across the country recently.

Chief Corporate Communications Officer of NNPCL, Olufemi Soneye, said the 1.5 billion litres equals 30 days of product sufficiency.

The company said it had monitored filling stations across several states, including Lagos and the FCT, and has noticed that fuel queues have since thinned out, “a development that will keep improving daily in other states,” the statement added.

The national oil company said it is also collaborating with relevant downstream agencies, such as the Nigerian Midstream & Downstream Petroleum Regulatory Authority, labour unions in the sector, and security operatives, to address hoarding and other unwholesome practices.

Shell paid Nigeria $1.09bn taxes, royalties in 2023

In a related development, Shell exclusively paid a total of $1.09 billion in corporate taxes and royalties to the Government of Nigeria last year through the operations of The Shell Petroleum Development Company of Nigeria Ltd (SPDC) and Shell Nigeria Exploration and Production Company of Nigeria Ltd (SNEPCo.)

The figures, announced in the just published 2023 Shell Briefing Notes, showed that SPDC paid $442 million, while SNEPCo remitted $649 million. Similar payments made by the two companies in 2022 amounted to $1.36 billion.

“These payments are Shell exclusive and do not include those made by our partners,” said SPDC Managing Director and Country Chair, Shell Companies in Nigeria, Osagie Okunbor.

“Shell Companies in Nigeria will continue to contribute to the country’s economic growth through the revenue we generate and the employment opportunities we create by supporting the development of local businesses,” Okunbor explained.

Shell has invested in Nigeria for more than 60 years. The Briefing Notes report on the progress of the businesses of Shell Companies in Nigeria – SPDC, SNEPCo, Shell Nigeria Gas and Daystar Power for 2023.

The reports show that the companies continued to power progress, working closely with stakeholders and communities to promote socio-economic development and providing cost-effective and cleaner energy solutions.

“It is important to emphasize that Shell is not leaving Nigeria and will remain a major partner of the country’s energy sector through its deep-water and integrated gas businesses. Our collective focus remains on delivery of safe operations and care for our people,” Okunbor added.