How DPR Is Fueling Petrol Scarcity

BEVERLY HILLS, July 31, (THEWILL) – With Nigeria's scarcity issues yet to abate, the Department of Petroleum (DPR) has embarked on what observers refer to as a crackdown on several major marketers by shutting down several stations and terminals belonging to firms such as Swift, Sahara, NIPCO, and DeeJones without due process or a thorough investigation being conducted.

The petroleum watchdog had repeatedly threatened within the last month to sanction marketers that engage in sharp practices, particularly marketers who sell Premium Motor Spirit (PMS) otherwise known as petrol, above the regulated price of N87 per litre.

For the last few years, marketers have operated irrespective of the subsidy backlog and the unlawful PMS pump price inflation has been attributed to a handful of rogue retail stations nationwide. Sources indicate that reporting lines via email, telephone, and social media had since been established by some retail operators to ensure that customers who were being cheated at pumps could appropriately communicate such.

“The DPR, which regulates the costly subsidy scheme for petrol and diesel, is putting a cog in the supply wheel at a critical time for the sector and the country by attempting to shut down terminal operations of certain marketers. This firebrand approach should be put on hold for now, while the much-touted reforms truly takes place, and that can only happen if we all work hand-in-hand,” said a source who chose to remain anonymous.

Nigeria's new administration recently introduced various provisions tailored towards ensuring that the DPR was more vocal and hands-on in its approach.

A few weeks ago, President Muhammadu Buhari ratified Mr. Mordecai Danteni Baba Ladan's appointment as the new Director of the DPR. He was faced with the daunting task of ensuring strict compliance by fuel marketers to the N87 per litre pump price for PMS.

Ladan recently held a meeting with officials of the Depot Products and Petroleum Marketers Association(DAPPMA), Major Oil Marketers Association of Nigeria (MOMAN) and the Independent Petroleum Marketers Association of Nigeria (IPMAN) to convey the need of a strict adherence to the regulated pump price of N87 per litre, or risk further participation in the Petroleum Support Fund (Fund).

Nigeria, one of Africa's top producers of crude oil, subsidises PMS and other fuels. The country must import the bulk of the 40 million litres a day that it consumes owing to a neglected refining system.

However, observers maintain that it is unfair to accuse marketers of hoarding or threatened with sanctions, as the continued interrupted supply of products can be traced to the increased dependence on the Nigerian National Petroleum Corporation (NNPC) and unpaid subsidies to marketers ranging between $200-$300 million.