Some oil marketers are beginning to change the logo of the Nigerian National Petroleum Company Limited on their filling stations, as the dealers 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, following the recent crash in the prices of refined products by the $20bn Lekki-based Dangote Petroleum Refinery.
Already 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, still along the busy road, have dropped the name of the national oil firm.
Independent marketers are seeking to achieve adequate product off-take at a cheaper rate, as the deregulation of the downstream oil sector has led to intense competition.
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.
This assertion was confirmed by the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, during an exclusive interview on Tuesday.
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.
Ukadike explained that marketers have adopted this new approach because the NNPCL is no longer the exclusive importer and distributor of refined petroleum products.
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.”
PUNCH
