Shipment company

NNPC transshipment fees could drive fuel prices up – Marketers

There are indications that the cost of transshipment and other logistics charges recently introduced by the Nigeria National Petroleum Company Limited (NNPC) could drive up the price of Premium Motor Spirit (PMS).

Traders who spoke to CIRI said on Tuesday that the fees introduced by the NNPC could increase the cost of the product from the current N162-N165 price range.

“Almost daily, we are faced with various accusations from the NNPC. Not just transshipment cost, the Lagos State government just informed us that we will be paying storage fees for the Storage Facility Fund. I fear that all these accusations will lead to a possible rise in fuel prices,” said former president of the Major Oil Marketers Association of Nigeria, Adetunji Oyebanji. CIRI.

Long queues are still seen at gas stations across the country due to the import of contaminated fuel.

Reacting to the development, Oyebanji said, “It would take more time for cross-linking of petroleum products across the country to normalize. Another major concern is the issue of bad roads. A truck that previously took two days to load from Ibadan to Kano now takes seven days. Why won’t there be long queues? »

Charges on transshipment operations were found on Monday to be part of measures taken by NNPC to fully recover its operational costs since the recently passed Petroleum Industry Act (PIA) made the state oil company a with limited liability.

NNPC’s campaign to recover costs through the new transshipment fee, it has been learned, has forced depot owners to raise the ex-depot price of gasoline, a development that has forced traders increase the PMS price above the approved cost.

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Further findings showed that the cost of PMS could reach or exceed N180/litre at most service stations over the next few weeks if nothing is done about the ex depot price hike by depot owners.

Most private depot owners have recently increased the ex depot price of petrol from the approved price of N142-N145/litre to between N162 and N170/litre.

This has caused many service stations owned by independent traders to dispense petrol above the approved price, and there are indications that the cost of the product will soon exceed N180/litre at most outlets. at retail, except at mega stations and those owned by major merchants.

The results showed that independent petroleum distributors in Nigeria operate approximately 90% of service stations across the country.

A document seen by our correspondent in Abuja on Monday showed that the rise in the ex-deposit price of petrol was informed by the NNPC’s introduction of a ship-to-ship coordination charge for each transshipment operation.

In a letter with reference NNPC/ML/STS01, dated February 18, 2022 and addressed to all traders, NNPC explained that the charge would cover labor and logistics and other items.

Parts of the letter, titled “Payment of STS Coordination Fee”, and signed by OIO Ajilo, for NNPC Group General Manager, Shipping, read as follows: “Please note that NNPC management has directed that from 10 February 2022, the sum of N500,000 will be charged for the STS coordination fee for each transshipment operation involving NNPC maritime logistics.

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Former Society of Petroleum Engineers President Joe Nwakwe said CIRI that the botched implementation of the Petroleum Industry Law was also a major factor in delaying investments that could address the above issues.

“We continue to submit amendments almost weekly on the PIA. This sends the wrong signals to investors. Key investments could have happened and solved some of the challenges we are currently facing,” he said.