NNPC raises top marketers from seven to 27

Nigerian National Petroleum Company Limited has increased the number of major oil traders in Nigeria from seven to 20, as part of measures to address persistent fuel shortages in the country.

A document obtained by one of our correspondents on Sunday revealed that with the national oil company update, the number of major traders operating in the downstream sector had risen to 27.

The decision to upgrade 20 oil companies/service stations to the status of large oil traders is the first in more than 25 years. Until the time of this latest decision, the only seven major oil traders in the country were TotalEnergies, OVH Energy (Oando), MRS, Conoil Plc, Ardova Plc, 11 Plc and NNPC Retail Limited.

However, NNPC’s new move was met with mixed reactions from oil traders and industry insiders. While some said it was aimed at increasing fuel supply across the country, others claimed the development would have no impact on the fuel supply situation.

By updating the stations to the status of the main traders, the companies would now source products directly from the NNPC at regulated prices of N148/litre.

This also means that stations would be required to sell products to consumers at regulated prices of between N170/N190 per litre, depending on location.

Industry operators also stated that the new development could also be due to the dysfunctional nature of NNPC depots across the country.

NNPC has around 21 depots, which are intended for the storage of petroleum products, particularly Premium Motor Spirit, popularly called gasoline, but all of them are reportedly not working.

It was deduced that the facilities had been redundant, as were the four refineries in Nigeria, which are also under the management of the NNPC.

Oil traders told our correspondent that the pipelines supplying or discharging products to the depots were broken or obsolete, stressing that this was the reason why NNPC had been using the services of private depot owners.

NNPC is the sole importer of gasoline in Nigeria, a task it has taken on for more than four years. Other traders stopped importing the product due to the difficulty of accessing foreign currency.

The latest document showed that the NNPC conferred the status of large traders to 20 new traders in the downstream oil sector.

The document revealed how the NNPC, in a letter with reference number PPMC/CS/ED/17, dated November 21, 2022, entitled ‘RE: Approval to operate under the category of main marketers’, raised the 20 firms to join the top category of marketers.

The companies include AYM Shafa Limited, AA Rano Nigeria Limited, BOVAS and Company Limited, NIPCO Plc, Rainoil Limited, Matrix Energy, Northwest Petroleum & Gas Limited, Swift Oil, Nepal Oil & Gas Services Ltd, Mainland Oil & Gas Limited and Emadeb. Energy.

Others include Optima Energy Resources, Ashrami Synergy Plc, Shema Petroleum Limited, Salbas Oil & Gas Limited, Zamson Global Resources, Pinnacle Oil & Gas Limited, Hong Nigeria Limited, and Danmarna Petroleum.

The letter was signed by the chief executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, although it was written on the official NNPC letterhead and logo.

“Accordingly, you are hereby directed to consider and place the above-mentioned companies in the category of primary traders in all deposit operations,” Ahmed wrote.

NNPC spokesman Garba-Deen Muhammad could not be reached to officially state the criteria for the upgrade. However, a source close to the matter told The PUNCH that part of the criteria was that the stations had to have branches all over the country and had to have warehouses.

The National Public Relations Officer of the Nigerian Independent Petroleum Traders Association, Chief Ukadike Chinedu, stated that although the update would allow beneficiaries to gain faster access to the NNPC PMS, it may not have much impact on the supply.

He said: “They upgraded them because some of them have tank farms and they normally supply these tank farms with products through their PDOs (private depot owners), and also, some of them have gas stations.

“However, there are others that even have some of these facilities that were not upgraded because I think the criteria that NNPC used to upgrade these companies is that each of them should have 50 service stations spread across the country for distribution. equitable.

“In addition, I am also aware that some of those companies that upgraded do not have this differential. However, the most important thing is the adequate supply of petroleum products”.

Asked specifically if upgrading the 20 companies would lead to an adequate supply of petroleum products, Ukadike replied: “That is also my question. Is it a panacea for scarcity, speculation, organized crime, etc.? These are the problems.

“It definitely won’t. Most of these companies that were upgraded have enough money, so the upgrade could have an effect if they are allowed to start importing petroleum products.”

Nigerian Petroleum Retail Outlet Owners Association President Billy Gillis-Harry said some of the upgraded stations had enjoyed status even before they were officially announced by NNPC/NMDPRA.

“Some of these companies have enjoyed the status of large traders for years. In fact, they have priority assignments, but that hasn’t helped all of their stations in terms of having petroleum products,” he said.

He added: “However, the list is increasing the number of top marketers, which is good. But it does not guarantee that petroleum products will be tomorrow at N179/litre, because that depends on where the product has been bought”.

The president of IPMAN’s satellite warehouse, Akin Akinrinade, told The PUNCH that the association had no problem with the upgrade as long as its members were able to purchase products at regulated prices.

According to him, IPMAN members are being “painted black” due to the higher prices they sold for fuel compared to the rate at which the main marketers dispensed the product.

He explained that this was despite the fact that depot owners normally obtained fuel at N148/litre from NNPC and sold it to IPMAN members at N220/litre.

Also reacting to the update, IPMAN National Operations Controller Mike Osatuyi told The PUNCH that although the association was not informed in advance about the update, NNPC was now a private company and was free to make any decisions. that I wanted without consulting. anyone about it.

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