Supply drops by over 68% in fuel Scarcity

The Major Oil Marketers Association of Nigeria(MOMAN) has said that the current fuel scarcity being experienced across the country may not be unconnected with a 68.04 percent drop in supply over the last three months.

Addressing the media yesterday, MOMAN Chairman, Mr.Olumide Adeosun, said there has been a sharp drop in the supply of petrol from the importer of last resort-the Petroleum Products Marketing Company(PPMC), a subsidiary of the Nigerian National Petroleum Company(NNPC) Limited in the last three months.

Giving a breakdown of the slide in fuel supply figures into the domestic market, Adeosun said the 438,000 metric tonnes were injected in April, N213,100 metric tonnes in May, and 140,000 metric tonnes as of June 20, 2022.

He explained that the consistent drop in supply over the three-month period has contributed in no small measure to the current gap in the supply and distribution chain.

In a related development, the National Operations Controller of the Independent Petroleum Marketers Association of Nigeria(IPMAN), Mr. Mike Osatuyi, has warned the Federal government against the continued payment of subsidies, saying the model was longer sustainable.

Speaking in a live interview on Arise Television, Osatuyi said at the current rate of about $123 per barrel of oil, the subsidy will rise to N6 trillion by end of 2022.

”As of the beginning of 2022, the budget for fuel subsidy was N4 trillion. But the rising oil prices occasioned by the Russia-Ukraine crisis, the figure will swell to N6 trillion.

Our plea is that Government should urgently convene a meeting of all stakeholders in the value chain in order to find a lasting solution to this problem”.

Adeosun added that the current scarcity of petrol is further compounded by distribution challenges created by the unavailability and continuous surge in

international prices of Automotive Gas Oil (diesel)

MOMAN members he said, are working with The Authority, NNPC/PPMC, NARTO, and other

industry stakeholders to make the product (petrol) available at the pumps and eliminate

the queues as quickly as possible.

He warned that MOMAN, as an Association, fears that the current supply framework cannot guarantee

steady and consistent supplies to the country given the current state of Government

finances and unpredictable international supply shortages.

”We, therefore, recommend gradual price deregulation with targeted palliatives (eg. transport and agricultural subsidies) to the public to ease implementation. However, in the interim, MOMAN recommends:

The current single supplier strategy is reviewed. The Federal Ministry of Petroleum Resources, in collaboration with the Ministry of finance and other relevant MDAs, should set up a task force to immediately focus

on increasing diesel supply through accelerated initiatives to increase local

modular refining capacity. This move will tackle the supply and distribution challenges,”