Yemisi Izuora
The Depot and Petroleum Products Marketing Association, DAPPMA has insisted that the current scarcity of petrol across the country was not as a result of alleged hoarding of the product by marketers, rather it linked the crises to the challenges encountered by Direct-Sale-Direct-Purchase, DSDP, initiative adopted by the Nigerian National Petroleum Corporation, NNPC.
Dr. Ibe Kachikwu, while serving as the Group Managing Director of the NNPC replaced the crude-for-products exchange arrangement popularly referred to as crude swap with the DSDP arrangement.
The DSDP was adopted to replace the Crude Oil Swap initiative and the Offshore Processing Arrangement so as to introduce and entrench transparency into the crude oil for product transaction by the Corporation in line with global best practices.
Under the old order, crude oil was exchanged for petroleum products through third party traders at a pre-determined yield pattern.
The DSDP option Oriental News Nigeria learnt was intended to eliminate all the cost elements of middlemen and gives the NNPC the latitude to take control of sale and purchase of the crude oil transaction with its partners adding that the initiative would save one billion dollars for the Federal Government.
In a statement in Lagos, however, executive secretary of DAPPMA Femi Adewole said the initiative recently ran into difficulties prompting firms involved in the programmer to opt out.
Adewole, recalled that DAPPMA members imported about 65 per cent of the nation’s total fuel consumption while Major Oil Marketers Association of Nigeria, MOMAN, imports about 15 per cent and PPMC/NNPC import the balance of 20 per cent but unfortunately the scenario changed drastically due to several challenges faced by marketers.
“We understand that NNPC meets this demand largely through its DSDP framework; however due to price challenges on the DSDP platform, some participants in the scheme failed to meet their supply quota of refined petroleum product, especially PMS, to NNPC. This is the main reason for this scarcity”, he confirmed.
While further analysing the situation, the DAPPMA spokesman recalled that the International price of PMS or petrol went up during the hurricane Katrina and has not dropped below USD$600 per metric tonne while the rate of USD to the Naira is N306 for PMS imports and also interest rate our banks charge is above 25 per cent.
“Landing cost of PMS in Nigeria, is above N145 per liter which means any of our members that imports would have to resort to subsidy claims, a policy already jettisoned by the Federal Government.
As it stands today, NNPC has been the sole importer of PMS into the country since October 2017. We all know that we presently run a fixed price regime of N145 per litre for PMS or petrol without any recourse to subsidy claims however we also have no control on the international price of crude oil.
Current import price of petrol is about N170 per liter, NNPC, which absorbs the attendant subsidy on behalf of the Federal Government, is the importer of last resort.
It is on record that any time NNPC assumes the role of sole importer, there are issues of distribution, because it is marketers who own 80 per cent of the functional receptive facilities and retail outlets in Nigeria.
While we cannot confirm or dispute NNPC’s claim of having sufficient product stock, we can confirm that the products are not in our tanks and as such cannot be distributed. If the products are offshore, then surely, it cannot be considered to be available to Nigerians”, the statement pointed out.
According to Adewole, NNPC imports and distributes through Depot and Petroleum Products Marketers Association: DAPPMA; Major Oil Marketers Association of Nigeria: MOMAN and Independent Petroleum Marketers Association of Nigeria: IPMAN. Our members pay PPMC/NNPC in advance for petroleum products and fully paid up PMS orders that have neither been programmed nor loaded is in excess of 500,000MT (about 800,000,000 litres) as at today and enough to meet the nation’s needs for 19 days at a daily estimated consumption of 35,000,000 litres”.
The DAPPMA, sympathised with Nigerians who are going through difficulties at this time, spending hours on fuel queues because of the current fuel scarcity due to no fault of of theirs and denied allegations of hoarding of products by marketers.
Hoarding he said is regarded as economic sabotage and “we assure all Nigerians that our members are not involved in such illicit acts.
While all kinds of allegations have been made in the media, it behooves on us to set the records straight, as Nigerians first, and as responsible business men and women who employ Nigerians”, he added.
Adewole, assured that if PPMC/NNPC supplies its members with products they will operate 24 hours loading to alleviate the suffering of the public as he assures that fuel marketers remain committed to the progress of the nation and its citizenry.