Numerous major and independent petroleum product retailers in Lagos State have temporarily halted operations at their fuel dispensing stations due to concerns about a possible rise in the pump price of Premium Motor Spirit (PMS), commonly known as petrol.
A significant number of filling stations have ceased operations, leading to unusually long lines of vehicles at the few stations still operational.
The Total Energies outlet near Abule (Sheraton Hotel Ikeja) and the MRS station in Ikeja, which initially opened in the morning, subsequently closed at approximately 9 am.
Elder Chinedu Okoronkwo, the National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), stated on Monday that there have been no definitive changes thus far. He indicated that the Nigerian National Petroleum Company Limited (NNPCL) would be better positioned to make any pronouncements.
Okoronkwo referred inquiries to depot operators, who have the expertise to assess the landing cost of the product.
Reliable sources suggest that the price of petrol could potentially increase to N750 per litre.
Transport operators, speaking with our correspondent on Monday, voiced their concerns about being unable to access petrol due to the closure of numerous stations across the state.
Recent reports had indicated that marketers were contemplating reducing their petrol imports.
Industry insiders noted that the rise in exchange rates had made the business of importing and selling petrol less profitable.
Just last month, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) stated that oil marketers had commenced petrol imports into the country.
Prior to this, the NNPCL had been the sole entity responsible for the importation of petrol.
During a stakeholders’ meeting in Lagos, Farouk Ahmed, the CEO of NMDPRA, revealed that out of the 56 oil marketing companies that applied for licenses, 10 had demonstrated commitment, with three already importing fuel into the country.
Ahmed also emphasized the government’s dedication to deregulating the sector in accordance with the Petroleum Industry Act (PIA). He indicated that efforts were being made to address previous challenges that had hindered smooth product importation.
Recently, oil marketers urged the government to address security concerns and suspend the 7.5% Value Added Tax (VAT) on diesel, among other measures, to improve operations in the downstream sector.
They also called for measures to address the increasing costs of food items and transportation, aiming to mitigate the effects of the sector’s recent deregulation on citizens’ welfare.
The Chairman of the Major Oil Marketers Association of Nigeria (MOMAN), Olumide Adeosun, commended the inauguration of the committee on fiscal policy and tax reforms by President Bola Tinubu. He stressed the importance of these measures in light of the current challenges faced by citizens.
In a statement, MOMAN affirmed the capacity of its members to import petrol into the country, especially since their licenses were routinely renewed. The licenses encompass multiple products including ATK, PMS, and AGO, and are essential for the sector’s functioning.
However, according to a key petroleum product dealer, rising exchange rates and dollar scarcity are creating difficulties for marketers. The source disclosed that they cannot maintain competitive pricing, as the NNPCL acquires forex at a lower rate than what marketers purchase at.
With the increasing exchange rate, the source indicated that pump prices would continue to rise, as crude oil and refined products are traded in dollars.
The source noted that unless the exchange rate disparity is addressed, they are not prepared to engage in imports, as this would result in selling at a loss.
Meanwhile, the President of the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGM), Olatunbosun Oladapo, warned that various factors, including rising international prices, high tax rates, vessel costs, currency scarcity, and naira depreciation, could influence the new price of Liquified Petroleum Gas (LPG), commonly referred to as cooking gas.
Oladapo anticipated that unless these factors subside by the end of the week, a price increase for cooking gas could be imminent. He expressed concern over the impact of these factors on consumers’ purchasing power and urged the government to intervene to alleviate the burden on citizens.
In conclusion, the petroleum sector in Lagos State is currently grappling with the potential for a petrol price increase, prompting many fuel stations to temporarily cease operations. Concerns over exchange rates, dollar scarcity, and other factors are also affecting the pricing and availability of Liquified Petroleum Gas (LPG), or cooking gas. The situation highlights the complex interplay between international market dynamics, government policies, and the impact on consumers and businesses.