NNPC still imports 70 % of petrol consumed locally

Deregulation of the downstream sector of the petroleum industry notwithstanding, the Nigerian National Petroleum Corporation (NNPC) still imports 70 % of the petrol consumed locally, an indication that the Federal Government is still neck deep in the supply and distribution chain.
There are also indications that the NNPC procures Automative Gas Oil (AGO) from the international market at N 38 per litre and sells same to major marketers at N 26,50 per litre, contrary to the principles of the deregulation.

Only recently, the new Managing Director of the NNPC, Mr Funso Kupolokun, called for tenders for the supply of petroleum products. It is expected that companies with successful bids will get the nod to commence supply of petroleum products to NNPC by the first quarter of the new year.
When the successful bidding companies commence supply of petroleum products, the corporation will account for 70 % of the products supplied to the local market through importation. In the first quarter of next year, 38 and 42 cargoes of 30,000 tons sizes each are expected to be supplied to the NNPC by firms with successful bids.

Speaking on the issue of product supply, Managing Director of Petroleum Projects International (PPI), one of the bidding firms, Mr Wole Omoboriowo, said companies invited to bid were split into two categories.
In the first category are firms with investment portfolio in excess of $ 400 mm. They are required to provide ample proof of their claims.
The second category comprises firms which have established track record in petroleum products supply and can show profile of ownership, management and a bank balance of at least $ 50 mm.

On the activities of the Petroleum Products Pricing Regulatory Agency (PPPRA), Mr Omoboriowo urged government to go the whole hog by removing the price ceiling on petroleum products. He said to monitor traders effectively, government must bring trained market analysts (traders) into the PPPRA, and advocated that such market analysts must be at home with the dynamics of the market.
Meanwhile, while major marketers are expected to sell AGO to the public at a pump price ceiling of N 32 per litre, the product is hardly available at this price at filling stations across the country. Investigations at the depots of the major marketers revealed that the marketers prefer to supply AGO directly to customers at prices ranging from N 38 per litre and above, as against the stipulated ceiling of N 32 per litre.