The Nigerian National Petroleum Company Limited has raised the number of major oil marketers in Nigeria from seven to 20, as part of measures to tackle the lingering fuel scarcity in the country.
A document obtained by one of our correspondents on Sunday revealed that with the upgrade by the national oil company, the number of major marketers operating in the downstream sector had increased to 27.
The decision to upgrade 20 oil companies/filling stations to the major oil marketers category is the first in over 25 years. Until the time of this latest decision, the only seven major oil marketers in the country were TotalEnergies, OVH Energy (Oando), MRS, Conoil Plc, Ardova Plc, 11 Plc, and NNPC Retail Limited.
However, the new move by NNPC was greeted with diverse reactions by oil marketers and industry experts. While some said it was aimed at boosting fuel supply across the country, others stated that the development would not have any impact on the fuel supply situation.
With the upgrade of the stations to major marketers status, the firms would now get products directly from the NNPC at regulated prices of N148/litre.
This also means that the stations would be mandated to sell products to consumers at regulated prices of between N170/N190 per litre depending on the location.
Industry operators also stated that the new development could also be due to the dysfunctional nature of NNPC depots across the country.
NNPC has about 21 depots, which are meant for the storage of petroleum products, particularly Premium Motor Spirit, popularly called petrol, but all of them are reportedly not functioning.
It was gathered that the facilities had been redundant, just like Nigeria’s four refineries, which are also under the management of the NNPC.
Oil marketers told our correspondent that the pipelines that supply or evacuate products to the depots were either vandalised or obsolete, stressing that this was why the NNPC had been employing the services of private depot owners.
NNPC is the sole importer of petrol into Nigeria, a task it has shouldered for more than four years now. Other marketers stopped importing the commodity due to the difficulty in accessing foreign exchange.
The latest document showed that the NNPC conferred the status of major marketers on 20 new marketers in the downstream oil sector.
The document revealed how the NNPC, in a letter with reference number PPMC/CS/ED/17, dated November 21, 2022, titled, ‘RE: Approval to operate under the major marketers category’, upgraded the 20 firms to join the major marketers’ category.
The companies include A.Y.M Shafa Limited, A.A. Rano Nigeria Limited, BOVAS and Company Limited, NIPCO Plc, Rainoil Limited, Matrix Energy, Northwest Petroleum & Gas Limited, Swift Oil, Nepal Oil & Gas Services Ltd, Mainland Oil & Gas Limited, and Emadeb Energy.
Others include Optima Energy Resources, Ashrami Synergy Plc, Shema Petroleum Limited, Salbas Oil & Gas Limited, Zamson Global Resources, Pinnacle Oil & Gas Limited, Hong Nigeria Limited, and Danmarna Petroleum.
The letter was signed by the Chief Executive, of Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, though it was written with the official letterhead and logo of NNPC.
“Consequently, you are hereby directed to consider and place the above-listed companies under the major marketers’ category in all depots operations accordingly,” Ahmed wrote.
The NNPC spokesman, Garba-Deen Muhammad, could not be reached to officially state the criteria for the upgrade. However, a source close to the matter told The PUNCH that part of the criteria was that the stations must have branches all over the country, and must have depots.
Operators react
The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Ukadike Chinedu, stated that although the upgrade would allow beneficiaries to get faster access to PMS from the NNPC, it may not have much impact on supply.
He said, “They upgraded them because some of them have tank farms and they normally give them products to these tank farms through their PDOs (private depot owners), and also, some of them have filling stations.
“However, there are others who even have some of these facilities that were not upgraded because I believe that the criteria the NNPC used in upgrading these companies are that each of them must have 50 filling stations spread across the country for equitable distribution.
“Also, I am also aware that some of those companies that were upgraded don’t have this spread. However, the most important thing is the adequate supply of petroleum products.”
When specifically asked if the upgrade of the 20 companies would lead to adequate supply of petroleum products, Ukadike replied, “That is also my question. Is it a panacea to scarcity, profiteering, racketeering, etc? These are the issues.
“Definitely it will not. These firms that were upgraded, most of them have enough money, so the upgrade might have an effect if they are allowed to start importing petroleum products.”
The President, Petroleum Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, said some of the upgraded stations had been enjoying the status even before they were officially announced by the NNPC/NMDPRA.
“Some of these companies have been enjoying the status of major marketers for years. In fact, they have priority allocations, but that has not helped all their stations in terms of having petroleum products,” he stated.
He added, “However, the list is increasing the number of major marketers, which is good. But it does not guarantee that petroleum products will be at N179/litre tomorrow, because this depends on where the product was bought.”
The Chairman, IPMAN Satellites depot, Akin Akinrinade, told The PUNCH that the association did not have any issue with the upgrade so long as its members were able to buy products at regulated prices.
According to him, IPMAN members are being “painted black” due to the higher prices they sold fuel compared to the rate at which major marketers dispensed the product.
He explained that this was despite the fact depot owners normally got fuel at N148/litre from the NNPC, and sold to IPMAN members at N220/litre.
Also reacting to the upgrade, the National Controller, Operations, IPMAN, Mike Osatuyi, told The PUNCH that although the association was not informed beforehand about the upgrade, the NNPC was now a private company and was free to take whatever decision it wanted without consulting anyone about it.
“We are absolutely fine with their upgrade. The NNPC is now a limited liability company, and now has the right to take whatever business decisions to the benefit of its shareholders,” he said.
