TheNigerianVoice Online Radio Center


By NBF News
Listen to article

By Clara Nwachukwu
Downstream oil marketers estimate that they may have lost in excess of N37billion to the first five days of the nationwide protests against the removal of subsidy on petrol.

The oil marketers are among those who have begun counting their losses since the past few days of anti subsidy removal protests and rallies, which have paralysed economic activities.

The losses are derived from closure of oil marketers businesses, which is basically the sale of petroleum products during the period of the protests and strikes.

Based on daily consumption estimates, the marketers have lost the value of the sale of:

Premium Motor Spirit (Petrol) - 30million litres per day x N141 x 5 days = N21.15billion

Automotive Gas Oil (Diesel) - 12million/L/D x N150 x 5days = N9.0billion

Household Kerosene - 10million/L/D x N100 x 5days = N5.0bn

Aviation Turbine Kerosene (Jet A1) - 2.3million/L/D x N140 x 5days = N1.61bn

However, while these bring the losses to about N37billion, the marketers told Vanguard that their greatest loss is from lubrication.

According to them, 'Contrary to what people believe, marketers don't make much profit from these other petroleum products because there are all sorts of regulations on them, but from oil lubrication, which is totally deregulated.'

Based on market share, major oil marketers claim they suffered 60 percent of the losses from petrol; 30 percent from diesel; and another 30 percent from kerosene.

They claimed they also bear 100 percent burden of the losses from the sale of Jet A1 and about 70 percent of the lubrication.

Although, the issue of market share has remained controversial between the major marketers and their independent counterparts, who argue that in view of their large size, their percentage share of the market with regard to petrol, diesel and kerosene are more than they are credited for.

Against this backdrop, the marketers called for the re-evaluation of current daily consumption estimates in order to determine actual national daily consumption and market share and by extension, the actual cost of subsidy paid out so far.

The reevaluation followed recent revelations of huge fraud in subsidy payments, that shot the figure from N240billion budgeted in 2011 to the controversial N1.34 trillion quoted by government.

The huge disparity is one of the major reasons the Organised labour and civil society groups reject the over 120 percent increases in the pump price of petrol, which rose from N65/L to N141/L following the removal of subsidy by the Federal Government on New Year Day.

Analysts have argued that the daily consumption estimates have been manipulated in order to stash away higher subsidy margins. They argued that petrol, which has the highest consumption estimates may actually hover between 15 and 20 million litres daily, as opposed to governments estimates of between 35 and 40 million/L/D.

However, a top management industry player, who spoke in confidence with Vanguard, disagreed with both the analysts' and government's figures. 'Certainly, it cannot be as low as some people are quoting and it is not as high as the 40million government says it is.'

He recalled that 'Lagos State alone as at 2002 had about 365,000 registered vehicles with an assumption of about 10million litres daily, add to the current registered vehicles in Lagos and across the country and you will see that it may actually be more than the 30 million litres marketers work with.'

He explained that former President Olusegun Obasanjo set up a committee, under Jackson Gaius-Obaseki, then Group managing Director, Nigerian national Petroleum Corporation, NNPC 'to determine the actual consumption levels of all petroleum products, to help him tackle the recurrent fuel scarcity and long queues at the filling stations that he was faced with.

'The Committee was set up in 2002, and the report came out in 2003, and this was how we determined the Lagos State figures, which was the highest and we did so for all the states in the Federation and Abuja.'

For this reason, he said marketers have continued to ask for a reevaluation of the figures to lay to rest all the controversies surrounding consumption levels and subsidy payments.

Already, a House of Representatives Committee, headed by Hon. Farouk Lawan, has been set up to investigate and audit subsidy payments, in order to verify government's claims of N1.34 trillion, the beneficiaries and daily consumption levels.