The Nigerian National Petroleum Company Limited has a new financial need of roughly N10 billion to cover the cost of lifting petroleum from its ships, and many depot owners may soon be forced to close their facilities as a result, according to information obtained by The Spectator.
On Wednesday, The Spectator observed that numerous filling stations in Lagos State were not offering goods to the general population.
According to depot sources who spoke to The Spectator, depot owners were having trouble raising between N5 billion and N10 billion to fulfill new orders from the NNPCL.
“NNPCL has enough stock in-country and we still buy from them pending when arrangements would be made for us to start ordering our products ourselves. Now, we have to raise about N10bn, some N5bn depending on the volume of the order to be able to access new products,” the sources said.
The sum, he continued, was in addition to the payment that had already been made prior to the increase in the price of gasoline.
According to Mike Osatuyi, National Controller, Operations of the Independent Petroleum Marketers Association of Nigeria, the impacted stations were left without products as a result of the depots’ increased product costs.
He claims that in order to purchase a fuel truck, filling station operators today need to have between N22.5 million and N23 million on hand. He further claims that one vehicle was sold for N8 million prior to May 29.
According to Tunji Oyebanji, a former chairman of the Major Oil Marketers Association of Nigeria, 33, 000 metric tonnes of gasoline had been sold at depots for as much as N21 million.
According to information obtained by The Spectator, several depot owners currently lack inventory since they ran out of supplies before President Bola Tinubu announced the elimination of the gasoline subsidy on May 29.
Because banks are wary of lending to the downstream industry, many depot owners would not be able to acquire financing, the source continued.
Before the elimination of subsidies, the price of gasoline at the pump ranged between N179 and N200 per litre, but it has since soared to almost N500 per litre.
According to Oyebanji, The Spectator, many smaller companies in the downstream sector would be compelled to cease operations and might be acquired by larger ones since they couldn’t satisfy the enormous financial requirements to gain new business.
The withdrawal of the gasoline subsidy, according to sources at the NNPCL, has made it difficult for the firm to get foreign exchange from the Central Bank of Nigeria.
“Since full deregulation started, CBN has stopped giving us forex. We also have to source for dollars just like every other player in the downstream sector. So, depending on the dollar rates and other market indices, we import and have to also factor other costs before we sell to marketers,” the sources noted.
Fuel subsidies had gulped N12tn between 2005 and 2022.
