…Commence shutting down of erring filling stations
The Nigerian Midstream and Downstream Regulatory Authority (NMDPRA) has threatened to revoke the licenses of some corrupt petrol marketers, even as it commences shutting down of stations engaging in unscrupulous practices with sales of petroleum products.
The chief executive officer of NMDPRA, Mr. Farouk Ahmed, who issued the threat in Abuja, said with the information at its disposal, action is being taking.
“The first action we took a couple of days ago was to shut down some of the depots where they have products. A lot of them have breached that trust or regulatory requirement, but we’ll have to start from somewhere. So we shut down about seven depots in Lagos and other parts.”
According to him, some unscrupulous elements among oil marketers have capitalized on the current precarious situation in the downstream sector to tinker with their meters and engage in all kinds of corruption in and out of the depots.
According to him, as at last weekend, Nigeria still had at least 30-day sufficiency, pointing out that the global crisis caused by the Russian and Ukrainian war in addition to the fluctuation in the value of the naira had affected business in the sector.
The NMDPRA boss noted that several meetings had been held with petrol marketing companies, independent marketers, transporters, the suppliers-the Nigerian National Petroleum Company Limited (NNPC) as well as other stakeholders to see how the situation can be addressed.
“Now, the market is not deregulated. So, we are still in a regulated environment as far as petrol is concerned,” Ahmed added.
He informed that President Muhammadu Buhari had approved an additional N10 for transporters to cover the transportation costs as a result of the high costs of diesel which he said is the main source of transporting other products within the country.
He explained further that one of the constraints within the distribution system had been the increase in the bunkers’ freight rate from between $16,000 to $19,000 per day to about $35,000 to $40,000 per day within Lagos and even more to Calabar.
“We sat down with the marketing companies and agreed to give them some palliatives through the NNPC, as well as through our regulatory control areas. But the market has continued to increase the cost of ex-depot prices.
“It has gone beyond expectation and reason. And Nigerians have been suffering due to that because when you talk to a retail outlet owner, he will say this is how much he bought it from the depot owner. But NNPC Limited is the sole importer. And they sell these products to the marketing companies within acceptable import parity pricing benchmarks.
“So, even with the additional cost of transportation, by trucking or by sea, the acceleration or the increase in the ex-depot price was completely outrageous,” Ahmed explained.
He stressed that as a responsive regulator, NMDPRA is concerned about the yearnings and sufferings of Nigerians who have no voices and had therefore decided to take action, not necessarily to destabilize the market but to strengthen it.
“We had intelligence from other relevant law enforcement agents, in addition to the intelligence information we had within our own system, so we corroborated all the information that we gathered,” he said