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Marketers Warn Against Imminent Fuel Price Hike over Poor Supply

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The disparity in the pump price of Premium Motor Spirit, popularly called petrol, is to further widen due to the incomplete delivery of products to many filling stations, oil marketers stated on Tuesday.

Dealers under the aegis of the Independent Petroleum Marketers Association of Nigeria, said there had been a lopsided pattern in the distribution of PMS lately, stressing that this would cause scarcity and worsen the price disparity in retail outlets.

They told our correspondent that the Nigerian National Petroleum Company Limited, through its NNPC Retail subsidiary, had not been delivering the exact number of trucks of fuel that were meant for independent marketers.

“Here in Port Harcourt, for instance, we have Oando and NNPC Retail, and they have products in some private depots. Master Energy and Liquid Bulk also have products, but there is no volume for independent marketers,” the National Public Relations Officer, IPMAN, Chief Ukadike Chinedu, stated.

He added, “Independent marketers have no volume in all these depots and we have over 3,400 tickets lying and waiting at the NNPC Retail account. This new system is now making independent marketers beg for petroleum products from NNPC Retail.

“It is until NNPC Retail has finished loading products to its own outlets before it would now attend to independent marketers. It has made the independent marketers the third tier in terms of the bulk distribution of petroleum products, which is very incorrect.”

Independent marketers operate about 80 per cent of filling stations nationwide, both in villages and other remote areas, making them the largest downstream distributors of petrol.

Ukadike explained that the recent lopsidedness in products distribution by NNPC Retail “is the problem that leads to price disparity,” adding that “we are now forced to go and buy products from retail outlets and some of these tank farm owners at a very exorbitant price.”

Also commenting on the issue, the National President, IPMAN, Debo Ahmed, said the situation at private depots (coastal depots) was quite worrisome.

He said downstream oil sector operators “must do something now to restore the depleted faith of independent marketers, especially at the Port Harcourt coastal depots.”

Ahmed’s remarks, which was forwarded to our correspondent by the association’s PRO, read in part, “In the second week of February this year, a vessel discharged about 28 million litres (622 trucks) of PMS in TSL depot (Oando).

“A 162-trucks programme was released for IPMAN, which was about 7.3 million litres. Out of the 162-trucks programme given to us, we struggled to load less than 100 trucks. About 62 tickets are still there waiting for the next vessel.

“In the last week of February, another vessel discharged 13 million litres (288 trucks) of PMS at Liquid Bulk. Only a 56-trucks programme was released for IPMAN. We were all expecting the next programme, just to hear that the product finished last week.”

He also stated that last week, a vessel with 13 million litres (288 trucks) discharged at Master Energy.

“As at this moment, IPMAN has not received any programme for that product. Another vessel will discharge at TSL. IPMAN, what’s our fate?” the association’s president stated.

He added, “This is the right time to toss away the crutches of comfort and restore the hope and expectations of all independent marketers. Is important we start our protest as soon as possible.

“This is important so that Nigerias will know what is going on with us and the new retail. The lopsided distribution pattern will continue to cause scarcity and price disparity in retail outlets.”

When contacted for comments on the matter, the Chief Corporate Communications Officer, NNPCL, Garba-Deen Muhammad, requested that the enquiry be sent to him via WhatsApp. This was done, but he had yet to reply up till the time of filing this report.

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Economy

Hardship: Labour Begins Strike, Vows to Ground Economy

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The Nigeria Labour Congress has vowed to ground the economy as it says the stage is set for a two-day nationwide warning strike in response to the severe economic hardships plaguing the nation on the aftermath of subsidy removal by the Federal Government.

This move has garnered widespread support from key stakeholders, including the banking sector, civil society organisations, and workers’ unions, as they unite to address the growing economic crisis in the country.

The National Union of Banks, Insurance and Financial Institutions Employees, the umbrella organisation representing workers in the banking and insurance industry, on Monday vowed to take part in the strike, effectively shutting down financial activities across Nigeria.

A statement signed by the General Secretary of NUBIFIE, Mr Mohammed Sheikh, underscored the importance of their participation in the two-day warning strike by the NLC, citing the need to draw the government’s attention to the dire economic situation faced by Nigerians.

The leadership of NUBIFIE has issued a notice that all banks will be shut down on Tuesday, 5 and Wednesday, 6 September 2023, in line with the NLC two-day strike directive.

“The directives are imperative to get the needed attention of the government and to warn it against interfering in the internal affairs of unions instead of addressing the punishing economic circumstances we find ourselves in,” the statement emphasised.

Speaking with The PUNCH, the Senior Deputy General Secretary of NUBIFIE, Mr. Aboderin Olusola, reiterated their commitment to the NLC’s cause, stressing the necessity of solidarity among industrial unions during these trying times.

Olusola said, “It was NLC’s directive to all the industrial unions and NUBIFIE didn’t have any option than to issue that circular to all our members and management of banks and insurance companies in Nigeria.”

Joining the chorus of concern, the United Action Front of Civil Society has thrown its full support behind the NLC’s two-day warning strike.

In a statement signed by the Head of the National Coordinating Centre for the United Action Front of Civil Society, Wale Okunniyi, the organisation expressed outrage over the hardship inflicted on Nigerians by the government’s decision to remove fuel subsidies and subsequently raise the price of premium motor spirit.

The Maritime Workers Union of Nigeria has backed the Nigerian Labour Congress to embark on the two-day warning strike.

This was contained in a letter on Monday titled, ‘Compliance to the Nigerian Labour Congress directive on a nationwide two-day warning strike’, signed by the Head of Media, MWUN, John Ikemefuna.

The PUNCH reports that on Friday, the NLC in a communiqué jointly signed by its National President, Joe Ajaero and Secretary, Emmanuel Ugboaja, said it decided to embark on a two-day warning strike following what was described as the failure of the Tinubu-led Federal Government to dialogue and engage stakeholders within the organised labor on efforts to cushion the effects of fuel subsidy removal on Premium Motor Spirit, popularly known as petrol, on the “poor masses”.

The President General of MWUN, Adewale Adeyanju, directed all its affiliates to embark on the two-day nationwide strike.

He said, “This decision is due to the Federal Government’s refusal to engage and reach an agreement with the organized labor on critical issues of the consequences of the unfortunate hike in the price of petrol, which has unleashed massive suffering on Nigerian workers and the generality of the Nigerian citizens.”

“The MWUN as an affiliate of the NLC, is obliged to comply with the directive and has consequently instructed all our members in all ports, jetties, terminals, and oil and gas platforms nationwide to partake on the two days total shut down warning strike as directed by the NLC.”

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Economy

Naira Continues to Appreciate, Trades for N850/$1 in Parallel Market

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The Naira on Wednesday continued its appreciation against the United States dollar on Wednesday, exchanging at N850 per dollar at the close of trading.

The currency appreciated on Tuesday, ending the day at N915 per dollar 24 hours after the Central Bank of Nigeria announced that it was intervening with some measures to curb the fall of the naira. It had earlier traded on Monday at N950 to a dollar.

Bureau de Change operators in Lagos said they bought and sold the naira at N830 to a dollar and N850 to a dollar on Wednesday, adding that demand was lower compared to last week.

However, in Abuja, a BDC operator, Aminu Zakari, said he bought and sold the dollar for N860 per dollar and N845 per dollar. According to him, there has been uncertainty in the parallel segment of the market following the announcement by the CBN.

At the Investor & Exporter forex window, trading commenced at N781.66 to a dollar and reached a high of N799.90 per dollar before closing at N759.86 to a dollar on Wednesday.

Earlier on Tuesday, it closed at N781.30 to a dollar.

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Economy

Marketers Propose N720/litre, Suspend Fuel Imports over Forex Crisis

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Oil marketers, on Sunday, indicated that the cost of Premium Motor Spirit, popularly called petrol, would rise to between N680/litre and N720/litre in the coming weeks should the dollar continue to trade from N910 to N950 at the parallel market.

They also hinted that dealers seeking to import PMS were being forced to put the plans on hold due to the scarcity of foreign exchange to import the commodity.

The warning came barely one week after the local currency crossed the N900/dollar ceiling, with the naira selling at over 945/dollar at the parallel market on Friday.

Oil dealers said the CBN Importers and Exporters official window for foreign exchange, which boast of a lower exchange rate of about $740/litre, had remained illiquid and unable to provide the $25m to $30m required for the importation of PMS by dealers.

This, they said, had led to the suspension petrol importation by dealers who were initially eager to import the commodity.

Operators told The Punch that the only marketer, Emadeb, who imported the commodity recently, was now finding it tough to recoup its investment due to the depreciation of the naira.

Senior officials of major oil dealers, who spoke to The Punch in separate interviews on Sunday, said PMS price hike was imminent unless the local currency appreciates in the coming weeks.

Leaders of the Major Oil Marketers Association of Nigeria of Nigeria, Independent Petroleum Marketers Association of Nigeria, and Petroleum Products Retail Outlets Owners Association of Nigeria said there was a need for the Federal Government to intervene to address the crisis.

The National Public Relations Officer, Independent Petroleum Marketers Association of Nigeria, Chief Chinedu Ukadike, explained that the price of petrol was now driven by the fluctuations in forex, hence Nigerians should expect a hike soon.

Asked whether oil marketers were considering an increase in petrol price, he replied, “Once there is a slack in the naira against the dollar, there is going to be an effect. The demand and supply of forex is a key factor. We should also understand that it is not only petroleum products that use forex.

“Other manufacturers who import one thing or the other are also searching for dollars. So, the surge for dollars has continued to increase. So now that the dollar is hitting N910 to N940, and approaching N1,000, you should expect to buy PMS at the rate of N750/litre.

“It is simple mathematics, once the dollar is going up, have it in mind that the prices of petroleum products would definitely increase because the products are dollar-driven.”

Ukadike stated that oil marketers were still sourcing dollars from the parallel market, as the CBN’s Importers and Exporters official window was illiquid.

“Nigerians should brace for a price regime of between N680 to N720 if the exchange rate stays around N910 to N950/$, but the price is going to hit N750 once the dollar rises to N1,000.

“This is because marketers still source dollars from the parallel market, and not only marketers but virtually all importers in Nigeria. There is no subsidy any more on petroleum products, so you expect the cost to fluctuate with the dollars,” he stated.

The IPMAN PRO also stated that the Nigerian National Petroleum Company Limited was still the major importer of petrol into Nigeria, though another importer, Emadeb, imported the commodity recently.

“NNPC is still the major importer for now. One other company, Emadeb, imported products recently, but because this product is being sold in naira, getting back their funds is another issue since the naira keeps depreciating, while PMS imports is in dollars.

“This is why it is often difficult to go back and buy again as an independent importer. That is the problem we are facing,” Ukadike stated.

On when Nigerians would start seeing the price increase, he said, “NNPC is like the sole distributor of petroleum products now, so once you see a change in the price of petrol at their outlets, then other marketers will implement it.”

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