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Fuel Scarcity: IPMAN Battles NUPENG, Depots

The Independent Petroleum Marketers Association of Nigeria, IPMAN, has blamed ongoing petrol scarcity across the country on supply shortage and high cost of running their operations.

IPMAN Public Relations Officer, Chinedu Ukadike in chat with Vanguard yesterday, said most inland depots were dry and had no product from Lagos and other coastal depots.

 Ukadike stated that the high cost of freighting the product from the southern depots had also made it impossible for marketers to operate profitably, despite the recent N10 per litre rate hike by the government.

He said:  “Depots in Makurdi, Enugu, Mossimi and Owerri cannot access petroleum products because they cannot be pumped. Since our refineries are bad, products are no longer being pumped through the pipelines.

“It cost marketers close to N40 per litre to freight the product to the stations from the South and that is after buying it for N162/litre from the private depot owners. How are you supposed to sell at N165/litre and remain in business?

“This is why most of our members are not selling. NNPC is the sole importer of the product and unfortunately they are not saying anything, the government is not doing anything”.

He noted that the business is profit driven and asked the Federal Government to increase the marketer’s margin in order for them to operate profitably.

The IPMAN spokesman said there are a lot of portfolio marketers who do not have petrol stations but get allocations from the depots which they later sell to marketers who will sell above government approved price.

“The president has added N10 to the freight charge but this does not cover our expenses because everything is driven by the price of diesel. The roads are bad and diesel is very expensive. Now there is heavy dependency on petrol because of the energy problem in the country.”

He urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, to crackdown on private depot owners who are selling above government approved ex-depot prices.

The IPMAN scribe also urged the government to hasten the repair of the refineries to end dependency on importation and also to fix the pipelines to reduce the distance trucks have to travel to obtain the products.

About 65% of Nigeria’s LPG imported —FG

Meanwhile, the Federal government, yesterday, disclosed that of the 1.3 million supply of Nigeria’s Liquefied Petroleum Gas, LPG, 65 per cent was being imported from the global market, while the balance was sourced from the domestic market.

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Speaking at the ongoing  2nd West Africa LPG Expo & NLPGA Summit 2022 in Lagos, Mr. Adedayo Adeshina, Programme Manager, National LPG Expansion Plan in the office of the Vice President, Prof Yemi Osinbajo, said the high price of the product was highly influenced by developments in the global market.

Specifically, he noted that some issues, including the Ukraine war, the ban on Russian oil, and high prices have impacted negatively on the domestic market.

Mr. Adesina, who commended the Nigerian LNG Limited for increasing domestic supply to the current 450,000 MT yearly, said the government through the Office of the Vice President was working towards increasing domestic supply, adding that huge opportunities abound for local and foreign investors in the sector.

According to him, the sector has over the years grown to become an N100 billion market, from the initial estimated N10 billion market many years ago.

Similarly, the President, of Nigeria Liquefied Petroleum Gas Association  (NLPGA), Mr. Nuhu Yakubu, expressed appreciation to the Federal Government for efforts targeted at deepening the safe use and handling of LPG in Nigeria.

Specifically, he said: “It is important for us and worthy of commendation for their roles in the supply and distribution infrastructure development support imperative for Nigeria’s LPG growth story are notable key players, who have played diverse pivotal roles, pulling huge private capital for the development of world-class LPG infrastructure, across the midstream, downstream and last mile, logistics, engineering, equipment and accessories supplies, etc.

“But most significant has been LPG supply sustainability which has earned Nigeria’s LPG sector its current international acclaim as one of the fastest-growing in the world. And some of the notable suppliers that are worthy of note and commendation, in no particular order include, Navgas/Algasco, NIPCO, Prudent, Matrix, TechnOil, Rainoil, Dozzy, Stopgap, Kwale Hydrocarbon, Greenville, NPDC, PNG, all of them either operating import receiving terminals or locally produced to bridge domestic supply gaps.

“This year is however more profoundly important for players in the LPG industry as it marks the 15th year of the commencement of the Nigeria LNG (NLNG’s) intervention in domestic Liquefied Petroleum Gas (LPG) supply, otherwise known as cooking gas, with its Domestic LPG (DLPG) Scheme. This scheme has made the most significant impact on domestic LPG supply. It has catalyzed a reduction in household energy poverty with the reduction in the use of dirty fuel sources for cooking.

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It has also stimulated growth in the industry, through its multiplier effect, and positive impact on forwarding and backward linkage businesses with massive infrastructure build-out that is currently experienced across the value chain

“To ensure a steady supply of products, deliveries are made with NLNG’s dedicated vessel to all NLNG’s approved domestic receiving terminals in Nigeria. The company has recently announced that it is dedicating 100% of its LPG production to the domestic market, as well as commenced deliveries of propane into the domestic market since 2021. With huge LPG production and supply prospects from its recent commencement of the LNG Train 7 project, clearly NLNG’s LPG supply intervention remains Nigeria’s most significant domestic energy policy.

“He also said: “You will recall that these achievements could not have been possible without the Head of the Federal Government at the inception of the scheme, our able father and former President and Commander-in-Chief of the Armed Forces, Olusegun Obasanjo, GCFR. His vision and tenacity to drive the domestic LPG scheme policy opened up the market for all of us. It is in this vein that my Exco, some members of the Governing Council and I, went to the city of Abeokuta to pay him a courtesy visit, to inform him of the progress of the industry and also invite him to come and share his wealth of knowledge as we plan towards greater achievements. We are glad that he gracefully received us and he confirmed  that he will be here with us tomorrow. We are indeed grateful.

“The 2nd edition of the West Africa LPG Expo and NLPGA Summit is a joint collaboration with the globally renowned and widely recognized LPG conference organizers, the “Gas Academy” based in Singapore.

This expresses our determination to embrace and deepen best practices in the evolution and switch to LPG in Nigeria. We are confident about this collaboration as it produces the synergies, growth strategies, and positive objectives as the outcome of this important LPG event.

“To help us all understand better for well-informed engagements in the sector, this year’s conference and exhibitions have a rich line up of experts, and speakers across diverse fields as well as a rich display of technologies and solution packages across the entire LPG value chain, designed to help us understand and harness the short, medium and long-term opportunities.“

Source: Vanguard

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