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Fuel Scarcity: Undercover black market operators in the supply chain

Operator-Pix-23-4-16With the lingering fuel scarcity across the country, a common sight on Nigerian streets and major roads are young men and women displaying fuel in small jerry cans at high prices. They are called black marketers, and are always available even when most filling stations are either under lock and key or selling at outrageous prices. Are they the only black marketers in the fuel supply chain that is creating artificial scarcity and exorbitant sales price?

The Guardian investigation at the Apapa, Lagos depots of the Nigerian National Petroleum Corporation (NNPC), major marketers and Independent marketers reveals that they are not the only one, as there are so many black market operators in the fuel supply chain right from the NNPC officials, major marketers, independent marketers, middlemen, filling station owners to the black marketers on the road.

According to Mr. Okechukwu Michael, an oil dealer for more than 10 years at Apapa, the problem in the oil sector has to do with high level of corruption in the NNPC, and among major and independent marketers, especially whenever there is scarcity.

Michael said: “I have been in this business for more than a decade now. I don’t have a filling station, truck or depot. I have money to buy fuel allocation from agents of the NNPC officials, major marketers or independent marketers, who always sell to me above government’s official rate.”

“I have errand boys and the contacts to scout for the allocation which can only be given whenever there is product or when product is being expected. Presently NNPC sells fuel allocation or franchise to the major marketers and some independent marketers at N76.00. While some major marketers load the products to their filling stations to sell at the government regulated price of N86.50k, others, especially the independent marketers, resell their allocation to us at between N115 to N120 or supply direct to filling station owners at N140 per litre. Sometimes, agents of the NNPC officials, and the major marketers offer us their allocation papers direct above government regulated price and direct us to the private depots where we can load the product after we have paid into the accounts they gave to us.

On how and where they load the product to and how much they sell it, Micheal said: “I have several costumers among the filling station owners in the Southeast zone. Most of us don’t supply product in Lagos. I hire tanker to convey the product from Lagos to the East where I supply to my customers.

“After expenses, the product may get to the East at the cost of N135 per litre and I will sell to the filling station owners at N160 per litre. Even during the period of no scarcity, we do the same business, but the only difference is that we do not make much gain. In the time of abundant supply of product, we make between N5 to N3 profit depending the source of the product.”

He lamented the exploitation and corruption in the supply chain, alleging that the greatest culprits are NNPC officials, major marketers, independent marketers and their fronts who are everywhere at their various depots and tank farms.

“These fronts and their backers are entrenched in the oil sector. That is why if we don’t play along with them, we cannot get product to sell. The most annoying thing is that they remit to the government’s coffer the official price of the product.”

There are so many Michaels at the Apapa depots doing the business, but they kept sealed lips when The Guardian questioned them about the business. Michael disclosed that he has some people transacting the business for him at the Calabar, Warri and Port Harcourt depots.

It was revealed that some filling station owners do not go the depots to buy product, rather they depend on the likes of Michael to get supply and sell to make gain.

While the black market operators within the supply chain smile to the banks, the final consumers of the product bear the brunt.

Several efforts by The Guardian to speak to any NNPC officials or personnel of its subsidiaries on the allegations and lingering fuel scarcity proved abortive.



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