Petrol: Lagos Fuel Stations Shut Down Over Speculation Of Pump Price Hike.

Significant and independent petroleum product marketers in Lagos State have shut down their dispensing outlets over speculation of a possible hike in the pump price of Premium Motor Spirit (PMS), commonly called petrol.

Our Correspondent reports that most filling stations have shut down while few in operation recorded unprecedentedly long vehicular queues.

TotalEnergies outlet by Abule (Sheraton Hotel Ikeja) and MRS at Ikeja opened for business early morning and shut down at about 9am.

On Monday, the National President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Elder Chinedu Okoronkwo, said nothing has changed. Still, the Nigerian National Petroleum Company Limited (NNPCL) would be better positioned to pronounce it now.

He referred our Correspondent to Depot operators, who are the right people to determine the landing cost of the product.

Our news source gathered from credible sources that petrol pump prices will likely climb to N750 per litre.

Also, transporters, who spoke to our Correspondent on Monday morning, complained that they can not access the product as many stations in the state have shut operations.

Legal Attorney Blog reported last week that marketers were contemplating declining further importation of petrol.

Read More:

Subsidy Removal: Labour, Marketers Fret Over Rumoured N720 Fuel Pump Price.

Our Correspondent was informed by industry sources that a rise in the exchange rate has made the business unprofitable.

Only last month, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said oil marketers have started importing petrol into the country.

Until now, the importation of the product was solely done by the NNPCL.

Petrol: Lagos Fuel Stations Shut Down Over Speculation Of Pump Price Hike.

At a stakeholders’ engagement in Lagos, the chief executive officer of NMDPRA, Farouk Ahmed, said of the 56 oil marketing companies that applied for licences, 10 demonstrated commitment. At the same time, three have imported fuel into the country.

Ahmed listed the three companies currently importing the product, including A.Y. Shafa, Prudent, and Emadeb, adding that others would import in the coming weeks.

He also expressed the federal government’s commitment towards deregulating the sector in line with the Petroleum Industry Act (PIA).

He said some challenges that previously affected the seamless product importation were being addressed.

Recently, the oil marketers urged the federal government to tackle insecurity and suspend the 7.5 per cent Value Added Tax (VAT) on diesel as part of measures needed to impact operations in the downstream sector.

The oil marketers also urged the government to implement measures capable of addressing the rising cost of food items and transportation in the nation to impact the welfare of citizens affected by the recent deregulation of the sector.

The chairman Major Oil Marketers Association of Nigeria (MOMAN), Olumide Adeosun, who applauded President Bola Tinubu for inaugurating the committee on fiscal policy and tax reforms, said the measures were needed as citizens are currently going through tough times.

In a statement, MOMAN confirmed the capacity of its members to import petrol into the country, especially since their licenses were renewed every quarter.

He said: “The reality is that many of us have importation licences that have never lapsed. We renew them every quarter via the NMDPRA portal. Some of us are also importing diesel, so we need these licences.

“The licences cover multiple products such as ATK, PMS, and AGO. The regulator will tell you we need them even when receiving products from the Nigerian National Petroleum Company Limited (NNPCL), particularly on the high sea.”

But speaking to our Correspondent, a key petroleum product dealer said marketers would protest rising exchange rates and dollar scarcity that have impacted their profit.

The source disclosed that they cannot compete any longer as the NNPCL accesses forex at N720 per dollar while marketers buy at 780 per dollar, and as of Friday, the dollar sold at N850, thus creating an imbalance in the system.

Asked if this will push for further pump price adjustment, he said, “So long as the exchange rate keeps going up, the pump price will keep going up.

“Go and check and see that crude price and refined products are sold in dollars. So we buy in dollars; as such, market fundamentals determine the price we marketers will sell.

“As it stands now, we are not ready to import, else we will sell at a loss because NNPCL gets dollar at a lower rate, and except this disparity is addressed, we are going back to the previous situation,” he said.

Meanwhile, the President of the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGM), Olatunbosun Oladapo, has warned that rising international prices, high tax rates and vessel prices, currency scarcity, and naira depreciation would determine the new cost of Liquified Petroleum Gas (LPG), commonly known as cooking gas if the listed factors refused to wane by this week.

“It will begin next week because international prices have risen. Ship costs and taxes have risen, but consumers have not earned more.

“Their purchasing power has decreased. Everyone is in tears. Consumers, middlemen, and retailers are feeling the pinch because business is now slow,” he warned.

Olatunbosun called the impending price increase “unfortunate,” adding that the situation is alarming since prices are rising. Nigerian customers are in a terrible condition since they can no longer buy petrol.”

He said consumers returned to cooking with firewood, charcoal, and sawdust.

“The government should step in and alleviate the masses’ suffering by providing palliatives and lowering taxes and levies,” he stated.

“Imagine that for every 1kg of gas priced at N700, the tax would be N3.50.” “How much is there left in this business?

He encouraged the government to tax profits rather than products since customers no longer purchased gas.

“Local taxes are exacerbating the problem,” he added, urging marketers who can purchase things locally to set pricing with “consumers’ sympathy” in mind.

According to reports, his reply follows the discovery that vessel scarcity in the worldwide market will drive up local costs of Liquefied Natural Gas, better known as cooking gas, in the coming months.

Due to a lack of vessels on the international market, charter rates have risen ahead of the 2023 winter, when demand for heating fuel is expected to increase.

According to statistics from Spark Commodities cited by Bloomberg, charter prices increased to $284,750 per day for November and $206,750 per day for October as of August 1, 2023, quadrupling the existing price of $70,500 per day.

“Tanker supplies are becoming increasingly scarce as traders use the ships as floating storage in the hope that LNG prices will rise as the weather cools.”

“Volatile shipping rates can eat up margin for an LNG trader looking to cash in on higher winter prices, and rising transportation costs can ultimately mean higher prices for buyers in Europe and Asia.”

The number of LNG boats floating on the water for at least 20 days increased in late July, with 42 vessels recorded, around 27 per cent more than last year.

The Nigerian LPG prices are internationally benchmarked and are always impacted by international pricing based on Nigerian Liquefied Natural Gas Contract prices.

Furthermore, the NLNG CP, like other globally traded commodities susceptible to price variations owing to market dynamics, is subject to change and can be evaluated higher or lower at least once to thrice.

The depreciation of the local currency would affect the domestic price of LPG.

According to the Central Bank of Nigeria, the dollar was worth N749.62 on Wednesday.

The Nigerian Liquified Natural Gas, NLNG, often sells the cooking gas it generates locally to off-takers at the current currency rate.

According to reports, the rates for 20 metric tonnes of LPG at the major Apapa, Lagos, depots between July 28 and August 7 ranged between N10.7 million and N11 million.

Local cooking gas users have been enjoying inexpensive pricing for several months due to declining worldwide costs.

Due to the naira depreciation, the price of LPG fell from an average of N730 per kilogramme in June to roughly N600 per kilogramme in July before rising to N750 per kilogramme in August.

According to the U.S. Energy Information Administration, the price plummeted 76.1 per cent in June to 2.10 per one million British Thermal Units on May 31 from 8.78 per one million BTU on May 31.

According to the National Bureau of Statistics, the average retail price for refilling a 5kg cooking gas cylinder declined by 6.71 per cent monthly, from N4,360.69 in May to N4,068.26 in June.

It fell 3.56 per cent from N4,218.38 in June 2022 to N4,218.38 in June 2022.

Kwara had the highest average price for refilling a 5kg cylinder with N4,750.00, followed by Niger with N4,691.16 and Zamfara with N4,683.33.

On the other hand, Ondo had the lowest price of N3,287.86, followed by Ekiti and Nasarawa, which had N3,288.46 and N3,364.62.

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