By Babatunde Ayedoju

It is no exaggeration to say that the last year has been the same for Nigerians in respect of their experience with fuel prices. It would be recalled that President Bola Ahmed Tinubu, during his inaugural address on May 29, 2023, announced an end to the fuel subsidy era.

Consequently, there was a spike in the price of petrol. Unfortunately, the situation has become so bad that the businesses of many oil marketers are now under threat, as they face the risk of shutting down and retrenching workers.

In April this year, the Independent Petroleum Marketers Association of Nigeria (IPMAN), threatened to cripple the supply of the Premium Motor Spirit (PMS), otherwise known as petrol, over the non-payment of N200 billion bridging claim by the Nigerian Midstream and Downstream Petroleum Regulatory Agency (NMDPRA) because of persistent increase in fuel pump price.

Back then, the Unit Chairman and Spokesperson of Aba Depot, Mazi Oliver Okolo, told newsmen that the threat had the backing of the union’s (IPMAN’s) leadership. He said that the NMDPRA owed IPMAN members the said amount despite a directive from Minister of Petroleum (Oil), Heineken Lokpobiri, saying that since February 2024 only N13 billion had been paid to members. He disclosed that the unpaid claim was crippling their businesses, adding that the petrol crisis had made some members shut down completely and retrench workers.

He said, “We have watched with apprehension also, the unpatriotic attitude of the leadership of the NMDPRA to offset this debt that has been accrued to us since September 2022. As businessmen and women, our members acquired bank loans to keep their fuel retail outlets running daily across the nooks and crannies of Nigeria, to serve the teeming population of Nigerians.

“However, it is demoralizing that many of our members have gone bankrupt and have become financially insolvent as a result of their inability to meet their financial obligations to their banks, arising wholly from their inability to get their monies from the NMDPRA.

“Consequently, also, the banks have taken over the business premises of many of our members. As indigenous organization chairmen, we are unhappy that rather than receiving support from the government to boost our businesses, we are being discouraged, by the head of NMDPRA.”

Likewise, second week of last month IPMAN again threatened to stop operations because of the high cost of the PMS sold to its members by the Nigerian National Petroleum Corporation Limited (NNPCL). IPMAN said that Dangote Refinery sold petrol to NNPCL at about N898/liter but sold to IPMAN members in Lagos at about N1,010/liter.

Aside from threatening to shut down, they demanded a refund from NNPCL of earlier petrol supply payments made by members. According to the National President of IPMAN, Abubakar Maigandi, NNPC purchased the product from the refinery at N898/liter but watering marketers bought it at N1,010/liter in LaliterN1,045 in Calabar; N1,050 in Port Harcourt; and N1,040 in Warri.

“Our major challenge now is that independent marketers have an outstanding debt from the NNPC and the company collected products through Dangote at a lower rate, which is not up to N900, but they are telling us now to buy this product from them at the price of N1,010/liter in LaliterN1,045 in Calabar; N1,050 in Port-Harcourt; and N1,040 in Warri,” he told the press.

About two weeks later, the Petroleum Products Retail Outlets Owners Association (PETROAN) disclosed that as fuel consumption dropped, oil marketers were counting their losses and around 10,000 wanted to shut down businesses. According to data from NMDPRA, fuel consumption dropped to 4.5 million liters per liter in August this year from 60 million liters per liter in May 2023, a 92 percent decline. The data showed that only 16 out of 36 states received fuel from NNPCL in August, leading to widespread shortage.

According to PETROAN National Public Relations Officer, Dr Joseph Obele, the cost of a truckload of PMS had moved from N7 million to N47 million in 16 months.

Addressing the press at that time, Obele who claimed that the affected marketers had a total staff strength of about a million, said, “Three days ago, there was a meeting at the national headquarters of PETROAN. At the meeting, there was, an indication that about 10,000 of our members would quit business in the next 45 days because their trading capital had been severely affected. That was why we wrote a letter to Mr President, dated October 21, requesting a grant of N100bn to save the affected marketers’ businesses from shutting down in the next few weeks.”

Abubakar Maigandi of IPMAN, while confirming how the situation had affected his union, said, “There is a drop in consumption and the price of a truckload is higher now. So, we have reduced the quantity of fuel we buy. For instance, someone who bought 10 trucks before can only buy eight now. So, we haven’t been getting the right quantity that we are supposed to get. We sell only the little quantities we get.”

The Secretary-General of the Nigerian Union of Petroleum and Natural Gas Workers (NUPENG), Afolabi Olawale, also lamented that the inability to buy products had led to job losses for truck drivers and petrol station workers in the country.

In an interview with the press, he said, “The economy is not smiling at all. Many petrol station owners cannot even buy a single truckload, and this has affected our members. Those of them that are truck drivers hardly get loads to carry anymore. Many petrol stations have closed down and our members who are petrol station workers have lost their jobs.”

Buttressing the point of the industry leaders, Mr Bayo Olowookere, an Akure-based fuel marketer, attributed the fuel price crisis and the attendant challenges with sales to the fuel subsidy removal, saying that nobody expected it to happen so suddenly; therefore, nobody was prepared for it. He said that, following the fuel subsidy removal, initial capital for a petrol marketer moved from N8.7 million to almost N45 million per truck. He added that now about five marketers have to pull resources together to buy a truckload of petrol and share, whereas purchase has reduced to almost one-fourth.

His words: “Capital has capitalized while profit margin remains the same. Our expenses have gone up very high, including the cost of diesel to power our generators. It takes a longer time to exhaust our stock. At the end of the day, the business consumes more than the sales we make.

“There’s no way we can survive in this kind of situation and we can’t adjust our pump, else customers will run away.”

While acknowledging that a lot of fuel marketers had shut down their businesses and more would still follow suit, Olowookere lamented that banks are not helping with loans and overdrafts to cushion the effects of the economic hardship on marketers.

He, therefore, recommended that banks should grant loans to marketers, while government the should increase workers’ salaries and make the necessary adjustments on prices of foodstuffs, because “these workers are our customers. If their income increases, they will be able to patronize us and we will sell more, make more profits, and be able to recruit more staff. As it is now, most marketers have reduced their staff strength. In some places, there is no supervisor or manager; the director does all the work.”

Similarly, Mr. Kayode Adekanye, the manager of a filling station in Akure, explained that marketers are either shutting down their businesses and reducing their staff strength because this is a very tough time for them.

He said, “In the past, with N9 million naira, one could get a whole truckload. That’s about 45,000 liters. But before you can order 45,000 liters, you need at least N46 million. You can see the difference.”

Adekanye said that while major marketers may be able to acquire trucks that would supply them with fuel, smaller ones cannot afford that, adding that the industry needs urgent intervention from the government, in terms of crashing the price of fuel, so that more people can be encouraged to come into oil and gas business again.