NNPC’s trans-shipment charges could lead to fuel price hike – Marketers

THERE are indications that the trans-shipment cost and other logistic charges recently introduced by the Nigeria National Petroleum Company Limited (NNPC) may lead to a hike in the price of the Premium Motor Spirit (PMS).

Marketers who spoke to The ICIR on Tuesday said the charges introduced by the NNPC could increase the cost of the commodity from the current N162-N165 price band.


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“Almost on a daily basis, we are being confronted with various charges by the NNPC. Not just the trans-shipment cost, the Lagos State government has just informed us that we would be paying storage fees for Storage Facility Fund. I’m afraid all these charges could lead to possible price hike in fuel,” former president of Major Oil Marketers Association of Nigeria Adetunji Oyebanji told The ICIR.

Long queues are still being witnessed at filling stations across the country due to the importation of contaminated fuel.

Reacting to the development, Oyebanji said, “It would take longer time for the reticulation of petroleum products across the country to normalise. Another major concern is the issue of bad roads. A truck that previously takes two days to load from Ibadan to Kano now takes seven days. Why won’t there be long queues?”

It was gathered on Monday that the charges on trans-shipment operations was part of moves by the NNPC to recover its operational cost fully since the recently passed Petroleum Industry Act (PIA) had made the national oil firm a limited liability company.

The NNPC’s cost recovery drive through the new trans-shipment charge, it was learnt, made depot owners raise the ex-depot price of petrol, a development that has forced marketers to increase the PMS price above the approved cost.

Further findings have shown that the cost of PMS might hit or exceed N180/litre in most filling stations in coming weeks if nothing is done about the hike in the ex-depot price by depot owners.

Most private depot owners recently raised the ex-depot price of petrol from the approved N142-N145/litre price to between N162 and N170/litre.

This made many filling stations owned by independent marketers dispense petrol above the approved price, and there are indications that the cost of the commodity would exceed N180/litre in most retail outlets soon, except in mega stations and those owned by major marketers.

Findings have shown that independent oil marketers in Nigeria operate about 90 per cent of the filling stations across the country.

A document seen by our correspondent in Abuja on Monday showed that the rise in the ex-depot price for petrol was informed by the NNPC’s introduction of a Ship-to-Ship Coordination Charge for each trans-shipment operation.



    In a letter with reference NNPC/ML/STS01, dated February 18, 2022, and addressed to all marketers, the NNPC explained that the charge would cover manpower and logistics and other items.

    Parts of the letter, which was titled “Payment of STS Coordination Charge,” and signed by O.I.O. Ajilo, for the NNPC’s Group General Manager, Shipping, read, “Please be informed that the NNPC management has directed that effective February 10, 2022, the sum of N500,000 will be charged for STS Coordination fees for each transshipment operation involving the NNPC Marine Logistics.”

    Former Chairman of Society of Petroleum Engineers Joe Nwakwe told The ICIR that the shoddy implementation of the Petroleum Industry Act was also a major factor pushing back investments which could solve the aforementioned problems.

    “We keep submitting amendments almost every week on the PIA. This is sending wrong signals to investors. Key investments could have come in and solve some of the challenges we are currently facing,” he said.

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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