Despite over N4 trillion subsidy for petrol in about 18 months, Nigerians are worried about the increasing petrol prices. It has become quite the challenge to get the product at the N195/l official rate. In a masterpiece, Daily Trust dissects the subsidy spent and the reality of the petrol market. It also discusses the hurdles in getting the product at the retail outlets by customers.
The paper reports that given the N400bn current subsidy monthly budget, Nigeria through NNPC, would have spent N2.4trn by June when the subsidy regime will end. That would have increased the subsidy funding within 18 months to over N6trn as against the initially planned N4trn.
However, despite this huge spending, Nigerians still buy petrol at over N195/l. The situation worsened this year, with customers saying they bought petrol for up to N600/l in Edo, Delta and Sokoto states. While NNPC retail outlets, which are public-funded enterprises, were alleged to prefer selling to hawkers rather than motorists. This claim was debunked by marketers and petroleum product transporters.
Mr John Odo, a consumer, said he bought petrol at N250/l at AA Rano in Ado, Nasarawa State, near Abuja, describing it as worrisome.
“This thing worries genuine consumers who believe that taxpayers’ money has been used to subsidise the petrol but they cannot get the product at the official rate.”
For Garba Yusuf, the N195/l official rate is only seen at major fuel stations within Abuja City Centre and the capitals of some states. But across other areas, marketers sell at whatever rate they decide without interference.
“In Kano, there are independent marketers that sell for N350/l, and we transporters bear this burden. What we have done is to simply pass it to the consumers.”
At a recent gathering of oil marketers in Abuja, they explained why stations sell petrol at varying prices. Their reasons included high profiteering and high ex-depot prices for bulk purchases.
The Chairman of the Major Oil Marketers Association of Nigeria (MOMAN), Adetunji Oyebanji, said there were other costs that operators incurred outside the ex-depot price.
On his part, the Chairperson of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Mrs Winifred Akpani, urged NNPC to only deliver products to depots (members) that would supply at the right price.
“We have all determined to ensure that we can help where we can help,” adding that profiteering was causing many of the problems.
But the President of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), Williams Akporeha, disagreed with the marketers. He noted that marketers had no right to increase the price because petrol was subsidised.
“Our position at NUPENG is that any depot or filling station that sells above the price must have the wrath of Nigerians to face.”
Another dimension of the fuel crisis is the preference of retail stations for cash payments. This is often in areas where there is relatively more ease. They prefer having customers buy products with cash rather than through Point of Sale (PoS) amid cash scarcity.
Mr Monday Bassey spent 25 minutes in the queue but was shocked upon getting to the dispensing point.. The attendant told him to find a place to park his car and join another queue to pay via POS.
“That queue took another 30 minutes, depending on how fast the internet transaction process is. If successful, you will be given the duplicate receipts which you give the attendant to fuel your car.
“The problem is that those who have cash are treated as ‘kings’ and would be served even without going through the queue.
“For those that obtain the POS receipts, it is another tussle to get back to the queue at the dispensing point to be served while competing with the ‘cash customers’, mostly transporters.”
Another Samuel Kolade said;
“I had no petrol and when they insisted on only accepting cash, I begged an attendant who insisted on collecting N1,000 extra if I would have to transfer the money to his personal account so he could dispense petrol. I had no choice”.
This is all despite the warning from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). The directive was “all retail outlets to ensure the free use of POS and bank transfer for the sale of petroleum products.”
But justifying this action, Hauwa Mahmud, an official at an outlet, insisted on a cleared POS payment before service. This is a result of poor banks network resulting in scores of declined transactions.
“At this station, we have not flouted the NMDPRA directive. We are only saying we will have to be sure your transaction is successful before we can serve you. And while that is going on, you don’t expect us to refuse service to other customers that come with cash just because of a distorted queue.”