Association stresses challenges, lament high diesel cost

The Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) says scarcity and the high price of Premium Motor Spirit (PMS) are caused by many challenges, especially the high price of Automative Gas Oil (AGO).

The association said the AGO, commonly called diesel, was the major cause of the unavailability of PMS because diesel was being purchased by its transporters at a high cost to fuel their trucks without profit.

Mr. Benneth Korie,the National President of the association, made this known on Monday in Abuja while addressing journalists.

Diesel is currently sold between N850 and N900 per liter at the filling stations, compared to N170 some months ago.

"We use diesel too to move all petroleum products; the vessels carry diesel too; we use diesel to operate the filling stations and depots; all these contribute a lot to the scarcity because of its high cost."

"If diesel is brought down to N170 as it used to be, then PMS will be sold at a lower price." "Subsidy on diesel should be even better than on PMS," he said.

Korie said the marketers were not happy selling above N200 per liter because of the high cost of getting fuel to the stations but had no choice because it was the only way they could assist Nigerians to ensure product availability.

"All our products are imported; we use vessels to bring products in to the depot, which is costly, and currently the depot owners are paying close to 85,000 dollars per day to bring in products."

"If you calculate it, including the cost of running the depot and taking products to filling stations, then Nigerians will consider the amount spent and understand better," he said.

On the persistent scarcity and queues experienced in Abuja and environs, Korie said they were caused by bad roads, which was another serious challenge that hampered trucks from distributing products.

"The Port Harcourt to Abuja road is so bad that marketers and transporters are losing money daily." If the road could be fixed, it would help the distributors, and the situation would improve.

"70 percent of the delay in getting the products to stations is caused by bad roads, while forex contributes 95 percent of the cost of importation."

"We use dollars to pay for shipments, the port authority, and the Nigerian Maritime Administration and Safety Agency (NIMASA)." So when talking about what it costs to bring these products to Nigeria, Nigerians should also consider other things, not just price.

"Marketers need to make a profit in the business, but no amount you sell the product would be good for Nigeria." "The issue is not about price or cost but availability and distribution of the product," he said.

He said the prices being sold at the filling stations vary because major marketers get their supplies from the NNPC Ltd. while independent marketers get theirs from others.

According to him, they are all marketers, but the price depends on how they get the product.

He confirmed that the intervention of the Department of State Service (DSS) has really helped to make it easier.

The briefing was on the backdrop of lingered queues and scarcity of fuel, challenges importers and marketers face as well as intervention of the DSS.