The Federal Government, on Saturday, announced that it had shut down the operations of seven depots in various locations in Nigeria for dispensing Premium Motor Spirit, popularly called petrol, at outrageous prices to retail outlets.
It said the action by the affected depots contravened the provisions of the Petroleum Industry Act 2021, and also contributed to the recent PMS supply crisis in the downstream oil sector.
The Chief Executive, Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, who disclosed this to journalists in Abuja, explained that the government had held several engagements with all stakeholders in the downstream oil sector.
“The stakeholders include the Major Oil Marketers Association of Nigeria, Independent Petroleum Marketers Association of Nigeria, Depot and Petroleum Products Marketers Association of Nigeria, etc,” he stated.
Ahmed, however, stated that despite the engagements with the dealers and the fact that the sector was still a regulated market, the affected depots went ahead to hike the cost of petrol far higher than what was approved for them.
He said the government had confirmed that the price of chartering vessels for transportation of PMS by marketers had increased, but stressed that the issue had been discussed with marketer on how it would be addressed.
“We sat down with marketers to discuss these issues and how to address it. But the marketers have continued to increase the ex-depot price beyond reasonable margins,” Ahmed stated.
He added, “The increase is outrageous despite the fact that the NNPC (Nigerian National Petroleum Company Limited) sells at a very low price to them. We had meetings with them (marketers) and asked them to comply with the approved price, but they have continued to increase the cost.
“So we had to take action and the first we took was to shut down some of the marketing depots. We shut down seven depots. We shut down Ardova and RainOil in Lagos, as well as all their facilities.”