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Deregulation a boon for marketers, but cheap imports take a toll.



Shina Amoo, who serves as the Chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN) at the Ore Depot, expressed his concerns about the impact of fuel deregulation, which involves the removal of fuel subsidies.

He highlighted how this policy has created challenges for marketers in Nigeria, primarily because there are no functioning local refineries.

Amoo shared his thoughts during a recent conversation with the media. He emphasized that government-owned depots have been neglected and are no longer operational. Consequently, many marketers have found themselves without much business to do, leading some to either sell their fuel stations or seek tenants for them.

To make matters worse, the Dangote Refinery, which was expected to help alleviate the situation, is not yet operational, adding to the complexities faced by marketers. He elaborated on this by stating:

  • “Deregulation is the best regime in our sector but the problem with this current regime is that our refineries are not working. Dangote that we believed in is not ready.  
  • “All government-owned depots are abandoned. All the pipelines have been vandalized. There is no solution to the free flow of the product in the country.  
  • “We are still on importation. Before deregulation, we could get petrol at N172 and sell at our stations for N190 or N195.  
  • “From the margin of N23, we pay for transportation and other logistics and have a small profit. But now, we buy at N580 from private depot owners. How do we make a profit? 
  • “As I talk to you, many of the private depot owners are selling to us at their pump price, not ex-depot price. What we are looking out for is how the government can come to our aid and allow independent marketers to operate.  
  • “If it is possible for the government to organize a depot that will allow us to have a margin so that we can sell at the same pump price with private depot owners. Many are idle because they cannot access the product at the official rate or at the rate that allows for profit.  
  • “Many of our people have sold their petrol stations and others have put their station for lease or for sale.” 

Amoo’s Recommendation 

According to him, the government can help marketers by involving them in its compressed natural gas (CNG) plan that was drafted to become a cheaper alternative to petrol, which is currently too expensive for the average Nigerian. He said: 

  • “The government can give us a grant for Compressed Natural Gas (CNG) conversion. It can do that through a development bank.  
  • “On the CNG, the government should support us to engage in gas sales to compensate for the loss of revenue from fuel.” 

What you should know: On August 25, 2023, ThePressNG reported that Nigeria’s Minister of State for Petroleum Resources,

Heineken Lokpobiri announced that the Port Harcourt refinery will be ready by December 2023. He also said that the Warri refinery will come on stream by the end of the first quarter of 2024, and Kaduna will also come on board towards the end of 2024.

According to Lokpobiri, the goal of the Tinubu-led administration is to stop petroleum products importation and increase local refining.