INVESTIGATION: Cartels, empty stations and dashed hopes in the quest for kerosene

Driving through the dusty, uneven and untarred roads filled with brick red sand and pot holes as deep as craters, Mosimi, in the Sagamu area of Ogun state, seems like a million miles away.

Navigating sharp bends on winding roads, driving slowly behind heavily loaded trucks and maneuvering between oil-bearing tankers is a travelers’ nightmare — but it has to be endured.

The mission is tricky — finding out the prices of petroleum products, both official and unofficial, in Ogun and Lagos states, and unveiling the secrets of the black market in both states.

Finally, the destination is in sight – the Nigerian National Petroleum Corporation (NNPC) depot located in Mosimi, Ogun state.

TheCable can count well over 50 tankers within a 500 meter radius, lining up and waiting their turn to drive into the depot and load their trucks for onward distribution to marketers.

Though there is no filling station in sight, save for an old looking station called Moore, some tankers are seen offloading petrol — to sell in gallons to commercial vehicles and private cars parked along the road.

It seems normal as everybody around goes about their business without even batting an eyelid.

Making her way to the main entrance, the reporter is stopped by stern guards and armed mobile policemen who wanted to know her mission.

After identifying herself and asking to see the depot manager, the officers insist she has to show evidence that she knows the station manager before she can gain entrance to the facility.

“You need a letter of introduction or madam needs to be expecting you before you come,” Emmanuel, one of the guards says.

“There is no access for you except if you have an appointment. So we cannot let you in.”

TheCable devises another means to milk information about the distribution matrix from the depot to the filling stations.

‘REPS’ OPERATING AS ‘CARTELS’

Scanning the entire area for a willing “informant” proved a bit difficult as everyone around seemed wary of strangers and appeared to be very busy.

However, when approached, a young amiable chap who identified himself simply as Kunle is willing to divulge the “secrets of the trade” to our reporter, who is disguised as a potential independent oil marketer.

In the sweltering heat of the midday sun, Kunle is visibly excited about the prospect of introducing a “newbie” to the business.

He is willing to take her to see one of the “reps” whom according to him, will give a breakdown of what the business entails.

That appears to be the only way one to gain access into the depot, but alas the young man said she would have to wait for a couple of hours to go in. Time was of the essence and other locations had to be visited.

While conversing in between the noisy roar of the tanker engines driving by, Kunle asks this reporter in a raised voice: “Have you ever gone into this business before? Which company do you want to supply? I will take you inside to see one of the reps so that you will know how to get the product out of the depot. I even have some marketers I can introduce you to – you can get any quantity of petrol or diesel you want.”


Selling directly from the tanker at Mosimi
Asked who the “reps” were, he said these were men who determine what happens within the fuel supply chain. They are “independent” oil marketers, different from the major oil marketers.

According to him, the “reps” call the shots and dictate who could be part of the business or not – they operate like a cabal.

‘DIESEL LIKE DOLLAR’

When asked about the prices that petrol, kerosene and diesel at loading point, Kunle reveals: “From inside the NNPC depot, if you want to load the whole of a truck, petrol is N127 or N128 per litre. This is for only NNPC trucks.

“But for the major and independent (marketers), at times they can load for N132 or N133 per litre.

“The price for petrol is usually stable, but if the demand for it is high, it could sell for more than N128.

“Kerosene is not available now and has not been available in the last six months.”

He moves on to diesel.

“The price of diesel can change anytime,” he continues.

“This morning, they were loading for N187 per litre and not up to two hours later, the price was increased to N200 per litre.”

How does the market play out during scarcity?

“Once you are in the system, it would not be hard for you,” he replies.

“Though the price for products will be normal inside the depot, the reps and marketers usually increase the prices and make huge profits from selling at higher prices.

“The tanker drivers are just there to load the trucks and carry the products.

“We will talk better when you are fully ready for the business.”

SCARCITY OF KEROSENE: A CURRENT REALITY

The search for prices and availability of the three petroleum products leads TheCable to NNPC mega station in the Kuto area of Abeokuta, Ogun state.

The attendants say kerosene is unavailable. According to them, the last time they were supplied kerosene from the depot was “over six months ago”.

They say though the NNPC sells for N150 per litre when the product is available, the few other stations who sell in town retail for an average of N190 per litre.

A quick stop at Oando filling station in Alakuko, a border town between Ogun and Lagos state, shows that Kerosene has not been sold there in the last three years.

The attendant offers: “Since we don’t have kerosene, we don’t sell it. We do not have a reservoir for the sale of kerosene. The last time we sold was more than three years ago.”

At Cincia Oil in Sango, one of the station attendants said: “We just stopped selling Kerosene now, we don’t have, but we have been selling since morning. When it is about to be scarce we sell for a higher price. But we sold at N200 this morning.”

A visit to Total filling station at Opic Estate, Agbara, also reveals that the scarcity of kerosene is ongoing.

EMPTY AND ABANDONED STATIONS

The road trip along the highways of Ogun state, shows that most filling stations are near empty with low patronage.

There are no queues in the stations that are selling on the drive from Sagamu on one end, to Agbara on the other.

On the drive from Adigbe to Obada, to Wasimi, to Papalanto, all the way to Ifo, TheCable counts no fewer than 20 abandoned filling stations overgrown with weeds and housing reptiles.

Jamiu, a mechanic, said most of the abandoned filling stations were formerly operated by independent marketers.

He says: “All these empty or abandoned stations you see are like that because of mismanagement. For most of them, their original owners have died and so the business dies off with them.

“Also, most of them are into the business of black market. Now you will not see them selling fuel, but just wait for when there is scarcity.

“Then, you will see some of them open for business and they sell at very high prices to people because they know people have no choice but to buy.”

IN LAGOS, KEROSENE IS ‘LIQUID GOLD’

According to data from the Nigerian Bureau of Statistics (NBS), in February, 2017, the average price per litre of kerosene in Lagos and Ogun state was N455 and N425.44 respectively.

TheCable visits some filling stations in Lagos, and discovers kerosene is largely unavailable even though there is a high demand for it.

Ganiyu, a male station attendant at the NNPC mega station along Alfred Rewane road, Ikoyi, says the scarcity situation is better.

“But even though they always supply us from the depot, we cannot say if what gets to us is exactly what we are supposed to get,” he says.

“We have petrol but they have not supplied us kerosene. It is very scarce. But when it becomes available there will be long queues here for it, because we sell for N150.”

Commenting on black marketers, the attendant says they are always on the prowl outside the filling stations but they are at risk of being caught by men of the state security service (SSS).

“If there is fuel scarcity, some will buy petrol from other places and come close to the filling station knowing people will come to queue for petrol there,” Ganiyu continues.

“They deceive people into believing that they are buying petrol sourced from NNPC – but that is not the case.

“But we don’t buy or sell black market. Our boss is scared to sell black market because of the NNPC logo.”

‘WE CONTROL THIS BUSINESS’

At the NNPC depot located in Ejigbo, a Lagos suburb, our reporter gets the phone number of one Dagiri, one of the “reps”. He is not around at the time of visit.

Also posing as a potential marketer, the reporter calls him on phone and inquires about the fuel supply business.

Dagiri says that petrol is widely available and is loaded at N135 per litre, while kerosene is loaded at N185 per litre.

He, however, says kerosene is not available but will arrive at the depot soon.

Assuring the reporter of the viability of the fuel supply business, he declares: “There is no issue with fuel supply. We control this business and if you want to go into it, we will help you. You will see people to sell to and make a lot of money.”

On price and availability of diesel, the cartel leader says: “You will get it (diesel) at whatever quantity you want, but the price is not stable. Sometimes we sell for N180 per litre and at other times N185 per litre.

He declines to comment on the market dynamics in the event of scarcity instead, insisting that the reporter should have a face-to-face meeting before he can divulge any further information.

MIND YOUR BUSINESS

At Peridot Oil and Gas in Amuwo-Odofin, our reporter observs that sale of kerosene is in progress, after a long search for a stattion selling the product.

The station’s advertised price is N200, however the actual price the commodity is sold for was N5 more. A huge difference given the volume of kerosene that would be sold.

When asked why the displayed price for kerosene is different from what was actually sold the station, attendant became irritated and defensive.

She said: “We have kerosene and sell it for N205. That is the price we charge and that is what people pay. They are not complaining.”

SOURCE: The Cable

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