By Miracle Ogunde
Following the recent crash in the prices of refined products by the Dangote Petroleum Refinery, reports have shown that some oil marketers are beginning to change the logo of the Nigerian National Petroleum Company Limited on their filling stations.
This as the marketers dump the franchise deals with NNPCL due to the stiff competition in the prices of refined products in the downstream arm of the oil sector.
It was gathered that many others are considering the move, particularly those in Lagos.
Punch reports that some dealers that used to have the NNPCL logo on their filling stations located around Wawa on the Lagos-Ibadan expressway, as well as at Ibafo, have already dropped the name of the national oil firm.
The deregulation of the downstream oil sector has led to intense competition, with independent marketers seeking to achieve adequate product off-take at a cheaper rate, as
Many filling stations formerly affiliated with the national oil company are now being renamed and rebranded under the ownership of private oil marketers, particularly in Lagos and surrounding states.
It was also learned that more marketers may relinquish their licences with NNPCL due to the reduced loading costs of Premium Motor Spirit (petrol) refined by the Dangote refinery, which is currently lower than the landing cost of imported petrol.
The PUNCH reports that a petrol price war was reignited in the sector recently after the Dangote Petroleum Refinery slashed its loading costs to N890 from N950 per litre.
Dealers explained that the rebranding of filling stations is a tactic by the marketers to pick up cheaper products from the Dangote refinery, and other import sources at a cheaper rate.
The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, confirmed this during an exclusive interview on Tuesday.
Ukadike explained that marketers have adopted this new approach because the NNPCL is no longer the exclusive importer and distributor of refined petroleum products.
A franchise licence in the oil sector refers to an official authorisation granted to an individual or company to operate a business or distribute products under an established brand or system within the oil industry.
This typically involves a contractual agreement that allows the franchisee to utilise the franchisor’s brand, resources, and operational model in exchange for fees or a percentage of revenue.
He said, “Yes, that observation is correct. Some marketers are changing and rebranding. Remember that there was a time NNPCL was the sole distributor and importer of petrol. So, marketers then gave their filling stations as franchises so that they could get products.
“So marketers normally give their companies to NNPCL to be able to have petroleum products. But now that the game has changed, you can even see some marketers now changing to MRS filling stations. Because MRS is now selling cheaper than any other station.
“People want where they want to get turnover and return on investment. If you are carrying Total on as a brand name and Total is not giving you petrol products, what is the sense of carrying the name? You have to remove it and get a better alternative. Most of those filling stations (that are changing name), NNPC don’t own them. NNPC only collected them on the franchise.”
Attempts to contact the NNPCL spokesperson, Femi Soneye, for an explanation of why marketers are switching from the company’s brand, proved unsuccessful, as he did not reply to messages sent to his phone.
An oil and gas expert, Olatide Jeremiah, who confirmed the arrangement said marketers used the franchise licence as a method to secure cheaper products from NNPCL which was still importing at the time.
He confirmed that the avenue that provided more revenue was disrupted by the emergence of the Dangote refinery and the inability of the national oil firm to secure an agreement to fix petrol prices with the Lekki-based plant.
The Chairman of PETROAN in Lagos State, Akinola Ogunyolemi, said most of the outlets are not originally owned by the NNPC.
He said the removal of the NNPCL symbol might mean the end of an agreement or a breach of it by either party.
“These are individual outlets. What they do is that, if an NNPCL contract expires and they are not ready to move forward with them or if they get a juicy offer, they will remove the NNPCL logo. They will rebrand again and put other people’s names. That could be the reason.
“Most of the outlets are not NNPCL-owned. You can have your filling station built and put NNPCL there, with your contract to them. Maybe they could not meet up with your agreement with them, (because they too also have some breach of contract sometimes), you might decide to go and give the station to Mobil or Total. It is yours,” Ogunyolemi said.
Experts also noted that more licenses may still be revoked because the price of imported petrol now costs more than products obtained from the Dangote refinery.
According to the latest data released by the Major Energies Marketers Association, the on-spot cost of landing PMS has reached N910.14 per litre at the ASPM and N910.52 at the NPSC depot.
The document also stated the 30-day average cost of petrol surged to N939.03 per litre.
Meanwhile, fresh details emerged regarding the behind-the-scenes developments that contributed to the reduction in the ex-gantry loading cost of Premium Motor Spirit, commonly known as petrol, sourced from the Dangote Petroleum Refinery and a possible reduced retail cost for Nigerians.
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