Over 27,000 fuel stations shut down in the Downstream Sector- OVH Energy, Hubb Stockman

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The Managing Director and Chief Executive Officer (CEO) of OVH Energy, an Oando licensee, Mr. Huub Stockman, has lamented that over 27,000 retail stations in the downstream sector are dilapidated and non-functional.

 

Following the development  according to industry observers may not be unconnected with the many challenges confronting the downstream sector, especially the non-payment of subsidy outstanding arrears running into billions of naira.

 

Stockman raised the alarm giving his keynote speech  titled ‘’Sustaining Industry Momentum in Downstream: What New Strategies, Tactics and Innovative Partnership’’ at the Nigeria International Petroleum Summit (NIPS) which held in Abuja.

 

This was even as he decried the prevalence of over 15 agencies in the same sector. He explained that the 27,000 out of service fuel stations was as a result of a completely fragmented market with almost no market tier having more than 10 per cent market share.

 

He pointed; “of all the countries I have worked in the last 30 years, Nigeria has the lowest margins on petrol, and the most fragmented market I have ever worked in’’.

 

According to him, over 15 agencies approach the company for the same purpose, lamenting that the development was impacting its operations negatively.

 

To address the huge number of agencies businesses have to contend with in the downstream sector, the OVH CEO advised that government should restructure their activities to be carried out under a one-stop shop approach.

 

On market operations, he said, government represented by the Nigerian National Petroleum Corporation (NNPC) imports close to 100 per cent of petroleum products, including Premium Motor Spirit (PMS), popularly called petrol.

 

Additionally, he alluded to infrastructure and distribution constraints as some of the industry setback, saying there is a jetty and tunnel which is very poorly utilized and maintained due to the low returns they get.

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