Subsidy Removal: NNPC Issues Directive To Marketers On New Price

• NNPC Limited directs oil marketers on new payment plan after fuel subsidy removal by the Nigerian government, with options for order consolidation and cash refunds.

• Concerns arise over affordability, while predictions point to decreased fuel consumption and potential industry shifts. 

• This development follows the Federal Government’s decision to remove fuel subsidies approximately two weeks ago.

EKO HOT BLOG reports that NNPC Limited, the Nigerian National Petroleum Company Limited, has recently issued a directive to oil marketers regarding the new payment plan for petroleum products.

This development follows the Federal Government’s decision to remove fuel subsidies approximately two weeks ago.

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In a circular issued by NNPC Retail, marketers have been advised to consolidate their previous orders at the previous fuel price in order to purchase a truckload of 45 million litres of petrol.

The circular states that NNPC Retail has provided options to assist customers in managing the additional cash flow requirement resulting from the complete deregulation of Premium Motor Spirit (PMS). Marketers can choose to consolidate their pre-paid self-owned tickets into fresh tickets in accordance with the revised price.

Interested marketers can seek guidance from their respective NRL Depot Representative to initiate this option. Alternatively, there is an option for a cash refund. Marketers who wish to pursue this option should submit an official request to the Managing Director of NNPC Retail, including evidence of payment and order details (such as RRR number, Sales quotation number, and Meter ticket number). Once the official requests and supporting documents are received, the refund requests will be processed.

However, oil marketers have expressed concerns about their ability to afford the new prices. Mike Osatuyi, the Operations Controller of the Independent Petroleum Marketers Association of Nigeria, questioned where marketers were expected to source such large funds, highlighting the significant price difference.

He suggested that instead of ordering a full truck, marketers could opt for a quarter or half truck, similar to the practice with diesel. Osatuyi also predicted a significant decrease in the country’s daily fuel consumption as a result of the price increase, stating that it could potentially drop from 66 million litres to as low as 30 million litres.

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Tunji Oyebanji, a former Chairman of the Major Oil Marketers Association of Nigeria and the Chief Executive Officer of 11 Plc, shared his views on the matter. He expressed his belief that ending fuel subsidies would help curb smuggling and provide an accurate reflection of Nigeria’s actual daily petrol consumption. Oyebanji also anticipated an increase in mergers and acquisitions within the industry due to the financial pressures resulting from the subsidy removal.

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