Petrol depot prices have increased by over 100% since the Nigerian government officially removed subsidies on May 29, according to The Punch’s latest findings. While the Nigerian National Petroleum Company Limited (NNPCL) announced it has enough petrol to last an extra month despite the subsidy removal, it seems many filling stations in Lagos have closed. Mike Osatuyi, National Controller Operations, commented that downstream businesses are struggling due to the rising cost of products at depots, such as the price of a 33,000 metric ton tanker that has gone from N8m to between N22m-23m depending on the location of the filling station.
The Punch sources disclosed that NNPCL has stopped ship-to-ship operations and began selling products to marketers at international prices since full deregulation of the downstream sector was declared. Marketers are reportedly being asked to re-access the NNPCL portal for re-registration. Tunji Oyebanji, former Chairman of the Major Oil Marketers Association of Nigeria and CEO of 11 Plc, stated that removal of subsidies is one of Nigeria’s “best things” since it will lead to gains that will eventually surpass the supposed losses. Nevertheless, many smaller companies in the downstream sector are at risk of folding up and selling to larger ones due to the inability to purchase new products.
Osatuyi predicts petrol consumption volume could fall by 40% leading to a true representation of Nigeria’s petrol consumption. He called on the government to ensure money saved from subsidies is used for the appropriate investments.
