Why Fuel Scarcity, Queues Persist

By Eric Elezuo

As mischievous as it may sound, several Nigerians, only a few days back staged a sarcastic celebration of the ongoing fuel crisis on social media in what they tagged ‘Four months of fuel scarcity’ – even managing to create a social media trend in the process. They proceeded to award the current fuel crisis spell the inglorious medal of “Longest ever fuel scarcity in Nigeria’s history.”

However, as much as the scarcity cannot be said to be absolute, Nigerians have lamented the unsteady nature of the pricing of the product and its availability, saying ‘you see it today, and tomorrow it disappears.’

In what has become a routine occurrence, agencies in President Muhammadu Buhari’s administration have continued to trade blames while the fuel situation worsens to the detriment of the everyday Nigerian.

In its avalanche of accusations, the Petroleum and Natural Gas Staff Association of Nigeria (PENGASSAN) accused fuel marketers in the country of causing the current scarcity of the product, alleging that the marketers are hell-bent seeing a hike in the pump price of petrol.

The association however stylishly distanced itself from the situation wondering why people were blaming it for the scarcity. It maintained that the scarcity came into effect two weeks before it issued its seven-day strike notice which was later called off in less than 14 hours.

Giving reasons to the persistence of the scarcity culminating in long queues in filling stations, even after PENGASSAN had called off its strike notice, the National Public Relations Officer, Comrade Fortune Obi, said: “There is scarcity because marketers want petrol price to be increased.

“They have been arguing that the margin is not profitable and therefore seek increment – which the government has been resisting and pegging at N145 per litre.

“Secondly, the rivalry between IPMAN (Independent Petroleum Marketers Association of Nigeria), MOMAN (Major Oil Marketers Association of Nigeria), and DAPPMA (Depots and Petroleum Products Marketers Association) over fuel allocation is a cause,” he said.

While stressing that the leadership controversies in IPMAN, hoarding by fuel stations owners and panic buying by Nigerians have also contributed to the scarcity, he recommended that the Department of Petroleum Resources (DPR) and government agencies go out to enforce sale of products at fuel stations that are hoarding the product.

“Virtually all stations have petrol, but they are not ready to sell so as to exploit the people,” he lamented.

Obi further explained that the Federal Government’s issue with IPMAN preceded PENGASSAN’s seven-day ultimatum.

“The scarcity started two weeks before PENGASSAN issued a seven day strike ultimatum notice on December 7. Then, the problem of the government and IPMAN was at the front burner, when IPMAN threatened showdown with government over irregular supply of petroleum products. Despite resolving the problem, the scarcity persists,” he said.

The scarcity which sneaked in late November and lasted through the Yuletide period has somehow defied the best efforts of the government and the Nigeria National Petroleum Corporation (NNPC), if not to eradicate the crisis, to at least ameliorate it.

In its frustration, the NNPC through its spokesperson, Ndu Ughamadu, has questioned the whereabouts of the huge quantity of fuel released on a daily basis, saying there is basically sabotage.

“The same quantity of fuel being pumped into Abuja today is what has always been sustained over the years. How come this time around, when the same volume is pumped it will disappear?” he complained to Premium Times.

Ughamadu recalled that earlier in the week, an average of 140 trucks of petrol were channeled to Abuja, compared with 100 trucks in the past, and wondered why most filling stations still say they don’t have fuel.

“Where have those trucks gone to?” he asked.

Characteristically, he blamed the high prices of petrol in most states on what he calls “internal and external diversion by marketers”, where products meant for certain places are diverted to other areas where they can be sold above N145 per litre, bringing to bear the question – who are the saboteurs? And again, where are the security agencies while this massive fraudulent activities are being committed?

Also, during the week, the NNPC arrested some marketers and hawkers for allegedly diverting and hawking petrol in Abuja; an action that has so far failed to solve the problem.

In his assessment, the Minister of State for Petroleum Resources, Ibe Kachikwu, who headed a committee set up to look into the persistent crisis, said the major cause of the fuel crisis was a shortfall in supply of petroleum products.

He assured at the time that the NNPC was making efforts to ensure that queues at filling stations disappear in a couple of days. That was many days ago!

The minister also assured at the time that there was adequate storage facility for imported products, and that emergency measures were in place to ensure that the products were available during the Yuletide and post-January. But the situation then and at the moment have proved otherwise. The Yuletide period, according to a cross section of Nigerians ended up being one of the worst in recent times, and nothing has changed since.

This is even as Kachikwu promised that four vessels laden with petroleum products would “berth in a few days and a total of 20 cargoes are also expected with petroleum products’’. Yet, queues have remained a common sight in major cities of the country. Even with the threat of ensuring stricter sanctions on any station that refuses to abide by the rules as well as sealing up or auctioning and dispensing free-of-charge their products to consumers any station found hoarding products, did not deter whoever the saboteurs are.

“So far, all the agencies of the government associated with oil and gas, are making claims of adequate and appropriate monitoring to ensure everyone plays by the rules, yet hoarding continues, and selling at prices higher that N145 also remains,” says an official of IPMAN in Apapa, who craved anonymity.

The DPR, during a routine inspection of some petrol stations also sanctioned some marketers found to be under dispensing the product to members of the public.

The crisis has persisted despite reassurances from the Kaduna Refinery that it has commenced production of PMS and will soon flood the market with enough products.

Blaming oil marketers, DPR Operations Controller Kaduna Zonal office, Isa Tafida, described actions of marketers as unpatriotic and inhuman.

He vowed to sanction any marketer caught in an unwholesome act that will worsen the suffering of innocent citizens. These have all proved to be lip service.

Another reason behind the crisis lies behind NNPC disclosure that the Landing Cost of PMS is N171 per litre, meaning that at N145 per litre, the Federal Government is currently paying a subsidy of N26 on a litre of the commodity. A subsidy the FG is clamouring to withdraw.

Group Managing Director of the NNPC, Mr. Maikanti Baru, explained that Cost, Insurance and Freight price of PMS was $620 per metric tonne, adding that at N305 to a dollar, the landing cost translates to N171 per litre.

In the crossfire of blames the South-West zonal chairman of Independent Petroleum Marketers of Nigeria (IPMAN), Ahmed Debo, blamed the NNPC for playing double standards by favouring the Depot and Petroleum Products Marketers Association of Nigeria  (DAPPMA) regarding supply of premium motor spirit (PMS), otherwise called petrol.

According to him, “NNPC treats private depot owners (DAPPMA) with priority, by giving them products while they now resell to our members at above the recommended ex-depot price.

“The recommended ex-depot price supposed to be N133.30 per litre, but they are selling at N138 to N143 per litre.

“If we add other costs to it, we cannot sell at N145 per litre. So until NNPC gives us enough supply and makes us to be independent of the private depot owners, over 900 filling stations may be shut due to lack of products and the hardship may continue for long,” he said.

A source among the marketers stated that NNPC, being the sole importer of petrol, should be held responsible for the resurfacing of queues across the country.

“There is only one vessel at the terminal ready to discharge, all marketers, major, independent and private depot owners, now depend on NNPC for products,” he said.

Another reason given for the scarcity was the fuel shortage as a result of burnt NNPC jetty many months ago.

“So the NNPC and the major marketers have been struggling to discharge effectively for the last two months, hence, the queues were the resultant effects we are seeing now,” a source said.

 

On their own part, the Independent Petroleum Marketers Association of Nigeria (IPMAN) advocated immediate demolition of over 2,000 stations, identified as ‘illegal’ filling stations operating across the country, to check the persistent scarcity of petroleum products.

IPMAN Board of Trustees’ Chairman, Aminu Abdulkadir, said the demolition of the retail outlets had become necessary to ensure availability of the products.

The meeting, which was presided over by the Chief of Staff to the President, Abba Kyari, was convened by the presidency to find lasting solutions to problems of petroleum scarcity and diversion of the commodity in the country.

He said the exercise, if carried out by the federal government, would also serve as deterrent to those who might want to frustrate federal government’s efforts towards ensuring stability and sanity in the oil sector.

“But what is true is that there are people who are not licensed marketers, who have access to these products and they are doing what they like best because they want to profiteer from it, thereby constituting these problems for government, marketers and Nigerians at large.

“And these over 2,000 unlicensed marketers are neither IPMAN nor DAPMAN members.

He described them as ‘lawless’ and have links with bunkerers, adding that they are the ones constructing filling stations without any documentation, and they are not members of NOMAN, IPMAN, DAPMAN and not under the retail of the NNPC.

Mr. Abdulkadir also said IPMAN is partnering with Pipelines and Product Marketing Company, PPMC, to expose those marketers selling petrol above pump price of N145 per litre. He however, dismissed the long queues as the Nigerian factor in play, saying Nigerians are engaged in panic buying.

The allegations did not exonerate ‘some middlemen’ who were fond of hoarding the products in anticipation of possible increase in official price.

“You see one thing with petroleum products once there is misinformation to the public, the effect is such that the consumers, the retailers and people who have no even business with the oil would all come out and converge on it and add pressure to this commodity. Abdulkadir schooled.

He broke it down as follows:

“If somebody has three cars in his house and he knows he can fuel his tanks anytime he will just buy 30 or 40 litres.

“Today every Nigerian is buying maximally full tank for all his vehicles thereby distorting real national consumption.

“National consumption has to do with product to be utilised that date, not for you to store 500 litres, 1,000 litres what are you going to do with it? This is one.

“Secondly, where there is also information that government is going to increase pump price, and also the middlemen come in to buy this product and stock it elsewhere, and this is outside the capacity of the NNPC.

In the assessment if IPMAN, the whole citizens are responsible for the chaotic situations because the national consumption is peaked at between 29 to 35 million per day but NNPC is injecting a cargo daily that is averagely about 49 to 50million litres. Then the big question! Where are these products? Who is consuming them?

Basically, it takes some time for the products to saturate the empty legal and illegal tanks if the queues will be totally eliminated. As a result, the association maintains that wherever queues are resurfacing, the answer is panic buying occasioned by middlemen who are not licensed to deal with this problem coming in to buy and hoard for profiteering.

It is known that hardly will a crisis emanate without insiders giving a helping hand, and this situation is not exclusive of most IPMAN members as 20 of their members had so far been sanctioned for various petrol related offences, which in no small has facilitated the persistent scarcity.

Offering solutions, the President of IPMAN, Mr. Chiedu Okoronkwo, said the passage of the Petroleum Industry Bill would encourage private sector participation and bring fuel crisis to a permanent stop. He also noted that a situation where there are three individuals that lay claim to the presidency of the association is also affecting fuel distribution since it the executive that does the distribution

Again, the Nigeria Ports Authority (NPA) and the Nigerian Maritime Administration and Safety Agency (NIMASA) should to stop collecting their charges contained in the pricing template in dollars.

The Speaker of the House of Representatives, Yakubu Dogara, proffered what he considered the only solution to the problem. He said local refining of crude is the only way to make fuel available and easily accessible to all Nigerians. He noted that none of Nigeria’s four refineries has worked optimally since President Buhari assumed office almost three years ago.

And for former Solid Minerals Minister, Oby Ezekwesili, total regulation is the answer, and the Federal Government must let go of the “politically beloved petroleum sector”.

The way it appears now, the scarcity looks good to continue pending when and if all accused bodies come to terms with reality.

 

Post Author: Eric Eric

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