From Uche Usim, Abuja

 

The Natural Oil and Gas suppliers Association of Nigeria (NOGASA), on Tuesday, raised the alarm that 75 per cent of filling stations and businesses were on the verge of shutting down as diesel, which powers their operations, now’s sells for N850 a litre and has eroded any profit they could make.

The President of the Association, Mr Benneth Korie, made the disclosure in Abuja at a media briefing to explain why there has been persistent petrol scarcity in Abuja and the north east.

According to him, the price of diesel would likely hit between N1,000 to N1,500 a litre by year end if concerted efforts are not made to tackle the horrible development.

He said various depots in the south and south south had petrol but the cost of transporting the commodity to Abuja and other parts of the north to sell at a retail pump price of N165 was pure business suicide.

He said: “The price of diesel is too high. There is no way oil marketers can buy diesel to power their tankers at N850/litre amid bad roads and other challenges, only to sell at petrol at a subsidised price of N165/litre.

“We have N4 trillion for subsidy till year end. But diesel is what is used to bring in petrol but it’s fully deregulated and extremely expensive. That is why if you go round filling stations in Abuja, only few places are selling petrol because if you load, you will run at at a loss”.

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Korie said with the increase in crude oil price at the international market, the landing cost of petrol is far above the N165/litre sales price.

“You can’t buy petrol at N195 outside other charges to sell at N165. It is a huge loss. Nothing is being done to address it. They should increase petrol cost a little to reduce money spent on subsidy. The saving will help CBN have Forex. Importers are not getting dollars to import. Everyone is sourcing from the black market at a very high rate. We need to increase petrol price. That is the only way out or we end this subsidy regime. Nigerians have to understand the situation”, he said.

On the recent increase in freight rate and payments for bridging cost made by the federal government, the NOGASA President said the effort was not felt because it was done when diesel was N350/litre as against the current price of  N850.

“This money even takes months and years before we receive it.

“If care is not taken, hotels, companies, etc will collapse. There is not electricity.

We can’t pretend because we’re losing. We can’t fool ourselves. We have to take that blow now to increase petrol price to survive.

“We can’t wait till the refineries are fixed. Nigerians will trek.

Removing subsidy is the final answer. But you can’t do that until refineries are ready”, he added.