Most fuel depot operators have been forced out of business as the Nigerian National Petroleum Company emerged the sole supplier of imported fuel in recent years, the Depot and Petroleum Products Marketers Association of Nigeria has said.
The Chairman, DAPPMAN and Managing Director/Chief Executive Officer, Northwest Petroleum and Gas Company Limited, Mrs Winifred Akpani, said less than 30 per cent of the operators were still in business.
Akpani, who spoke during the Nigeria Petroleum Downstream Consultative Summit held online, said, “A lot of them are in one problem or the other with banks and the Asset Management Corporation of Nigeria.
“In the past few years, there were quite a lot of investment in depot construction across Nigeria because opportunities presented themselves for people to make such investment.
“Subsequently, as government has continually overtaken the whole operations in the downstream sector, to a large extent, it has been very difficult for a lot of the depot owners to survive, especially those who had not made further investment into other areas of the sector.”
According to Akpani, on the average, a depot costs between N3bn to N5bn.
She said some operators who were able to make subsequent investments into retail, haulage, marine vessels and pipelines, among others, had been able to continue to operate.
She said, “What has happened over the years is that with the NNPC taking over almost 100 per cent of imports until recently, and then fixing very low margins for operators who take these products for distribution, a lot of the depot operators have not been able to continue to operate.
“Some operators are actually under receivership, and as at the last count, we have less than 30 per cent of operators still in business. With that, it becomes impossible for any expansion or new investments.”
According to her, deregulation is complete removal of government regulations or control, especially with regards to pricing of products.