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Tag: Fuel crisis

  • Fuel crisis deepens in Lagos as prices soar, scarcity bites harder

    Fuel crisis deepens in Lagos as prices soar, scarcity bites harder

    By Udeh Onyebuchi and Musa Idris

    The recent upward adjustment in petrol prices across Nigeria has worsened fuel scarcity, leading to a confused situation in Lagos, where motorists and commuters grapple with exorbitant costs and long queues

    The price hike was implemented shortly after the Nigerian National Petroleum Company Limited (NNPCL) admitted owing suppliers $6.8 billion, resulting in a nationwide surge in pump prices.

    In Lagos, the official base price for petrol is now set at N855 per litre, which NNPCL retail stations are adhering to.

    Independent marketers are selling fuel at even higher prices, with N1,018 per litre being reported, and others such as NIPCO and Conoil adjusting their rates to N955 and N940 per litre respectively.

    In contrast, independent stations are listing fuel prices between N900 and N980 per litre.

    A survey of filling stations in Lagos showed that while some NNPCL outlets still have stock, others are completely out of fuel, pushing motorists to find alternatives.

    Read Also: Develop sources of IGR for self-funding, Reps committee tells Nigerian universities

    The scarcity has created an opportunity for black market sellers, who are exploiting the crisis by charging up to N1,500 per litre in various parts of the city.

    Both commuters and motorists are experiencing significant inconvenience.

    A trader, who preferred to remain anonymous, commented: “The price increase is unbearable. I’ve been waiting for hours with no guarantee of getting fuel today. The black market is our only option, but the prices are outrageous.”

    John, a bus driver, voiced his frustration, noting that the situation has severely disrupted his daily routine.

    “I haven’t gone to work for some time now because I can’t afford the black market price, and the filling stations are empty,” he said

    The effects of the hike are rippling through the economy, with transportation costs escalating and traders warning of an inevitable rise in the prices of goods and services.

    A commuter waiting at a bus stop in Oshodi also said: “I spend almost double on transport now. it’s affecting everything food prices, market prices, everything is going up. How are we supposed to cope.”

  • Why fuel crisis lingers, by IPMAN

    Why fuel crisis lingers, by IPMAN

    The Federal Government’s inability to improve fuel supply is caused by  the dysfunctional refineries, failure to pay marketers their over N800 billion subsidy debts and poor maintenance of the majority of the 22 depots owned by the  Nigerian National Petroleum Corporation (NNPC), The Nation has learnt.

    Other reasons were the cost of fuel import and marketers’ inability to access foreign exchange (forex).

    It was gathered that many of the 22- state owned depots were not working  because NNPC lacks the capacity meet national fuel requirement.

    Investigation by The Nation revealed that NNPC is rationing fuel due to high cost of importation. During a visit to the NNPC Satellite depot in Ejigbo, a suburb of Lagos, it was discovered that the corporation supplies the depot between five and 10 million litres of fuel  weekly, instead of 21 million litres.

    The Independent Petroleum Marketers Association of Nigeria (IPMAN) Southwest Chairman,  Alhaji Debo Ahmed, said many of the depots were not working optimally.

    In a telephone interview, he said Aba, Port Harcourt, Owerri,  Ibadan and Mosimi depots were functioning at low capacity.

    He said the failure of the NNPC to distribute fuel evenly nationwide is also a cause of the problem.

    Ahmed said: “Often times, NNPC supplies fuel to private depots at N156 per litre instead of N133 per litre a development, which made some marketers sell fuel at higher rate than the official pump price. This, among others, contributes to the pocket of crisis, which the downstream sub-sector of the oil and gas industry is facing.’’

    Also, the IPMAN’ Chairman, Ejigbo Sattelite Depot, Mr Alanamu Balogun, said: “Fuel scarcity persists despite the establishment of two depots in Apapa, Lagos, last week, by private investors.”

    He said the inclusion of Folawiyo and Emadel depots to the depots in the country is yet to improve fuel supply. He said Ejigbo depot was battling storage problem as its five bigger storage tanks are not working well, adding that the development made the depot to use the smaller tanks for operation.

     

  • Why fuel crisis lingers, by IPMAN

    The Federal Government’s inability to improve fuel supply is caused by  the dysfunctional state of the refineries, failure to pay marketers their over N800 billion subsidy debts and poor maintenance of the majority of the 22 depots owned by the  Nigerian National Petroleum Corporation (NNPC), The Nation has learnt.

    Other reasons were the cost of fuel import and marketers’ inability to access foreign exchange (forex).

    It was gathered that many of the 22- state owned depots were not working  because NNPC lacks the capacity meet national fuel requirement.

    Investigation by The Nation revealed that NNPC is rationing fuel due to high cost of importation. During a visit to the NNPC Satellite depot in Ejigbo, a suburb of Lagos, it was discovered that the corporation supplies the depot between five and 10 million litres of fuel  weekly, instead of 21 million litres.

    The Independent Petroleum Marketers Association of Nigeria (IPMAN) Southwest Chairman,  Alhaji Debo Ahmed, said many of the depots were not working optimally.

    In a telephone interview, he said Aba, Port Harcourt, Owerri,  Ibadan and Mosimi depots were functioning at low capacity.

    He said the failure of the NNPC to distribute fuel evenly nationwide is also a cause of the problem.

    Ahmed said: “Often times, NNPC supplies fuel to private depots at N156 per litre instead of N133 per litre a development, which made some marketers sell fuel at higher rate than the official pump price. This, among others, contributes to the pocket of crisis, which the downstream sub-sector of the oil and gas industry is facing.’’

    Also, the IPMAN’ Chairman, Ejigbo Sattelite Depot, Mr Alanamu Balogun, said: “Fuel scarcity persists despite the establishment of two depots in Apapa, Lagos, last week, by private investors.”

    He said the inclusion of Folawiyo and Emadel depots to the depots in the country is yet to improve fuel supply. He said Ejigbo depot was battling storage problem as its five bigger storage tanks are not working well, adding that the development made the depot to use the smaller tanks for operation.

    “NNPC is yet to fix the tanks despite the fact the management of the depot has called its attention to it.  In a week, we receive 10 million litres of fuel. In the past three weeks, the depot has been loading fuel on Saturdays, which we supply to marketers within three days – that is Monday, Tuesday and Wednesday.“

     

     

     

  • Senate blames fuel crisis on NNPC, marketers

    Senate blames fuel crisis on NNPC, marketers

    The Senate Committee on Petroleum Downstream has blamed the Nigeria National Petroleum Corporation (NNPC) and marketers over short supply of the petroleum products in the country.

    The Committee Chairman, Senator Kabiru Marafa, spoke yesterday in Gusau during an oversight assignment in the state on fuel situation in the country.

    Marafa, who was accompanied by a member of the committee, Senator Abdullahi Danbaba, said the inspection was part of the assignment given to the committee by Senate President Bukola Saraki.

    “I have directed all members of this committee to go back to their constituencies to investigate the problem at the grassroots so that we take approximate measures to address the scarcity.

    “We visited NNPC zonal depot Gusau to find out the quantity of fuel supply to the depot and we noticed short supply of the commodity.

    “We are going to present our findings to the senate. It is very disturbing to see the suffering faced by people due to fuel scarcity in the country.

    “We question the NNPC over this issue because the Group Managing Director of the NNPC, Maikanti Baru said they had doubled the quantity of daily supply of the product, but it is not available to the public.

    “Another unfortunate thing is the attitude of our filling stations owners who sell this commodity to the public; they are involved in one or two malpractices.

    ”In fact out of the filling stations we visited only two have complied with the government directives in this regard,” he said.

    Marafa commended the state Department of Petroleum Resources (DPR) field office in ensuring compliance at the filling stations.

    The senator urged the DPR to sanction filling stations involved in hoarding and selling above approved government price of N145 per litre.

  • Opadokun blames fuel crisis on importation

    Opadokun blames fuel crisis on importation

    Former Secretary of the National Democratic Coalition (NADECO) Ayo Opadokun yesterday decried the fuel scarcity in the country.

    He blamed it on over dependence on importation of the premium motor spirit (PMS) into the country.

    Opadokun spoke in Offa, Offa Local Government Area of Kwara State at a colloquium organised by the Galaxy Clique in honour of late Chief Josiah Sunday olawoyin.

    The lecture was titled “Offa in Yoruba History”.

    He suggested outright ban on importation of fuel into the country to put an end to perennial fuel crisis in the country.

    Said he: “I must confess to you, I am extremely sad, weakened but I know it to be a cumulative effect of the prolonged misrule of the military over Nigeria. When Buhari was there as the military Head of State, the refineries that were built none has been since the one he built. The population was not as large as this, the vehicular movement was not  as large and wide as this. Since then what has happened, those who took over from him had totally ravaged Nigeria. What they needed do, they did not do. How on earth will a sane people in government construct the policy on home construction of domestic fuel on importation,.

    “I was part of the Nigeria Labour Congress (NLC) team that did sufficient research, we went abroad to Libya, Egypt, Saudi Arabia, UAE, Venezuela to fund out how much it costs to mine one litre of crude oil. Nigeria’s own is the most costly in the  world and then what are they doing now.

    “Each time, the independent marketers go ahead to buy at world market so Nigerians are subjected to the vagaries of world market crude oil prices. What  has happened in the last three, four months, is that because the government was not willing to add more money to their profit, they said  they will not import.

    “So the NNPC has been importing the totality of fuel being used in Nigeria. But because we have been used to a system where fuel tanks are being built independent marketers, they  made that unavailable and impossible for the distribution to go seamless. That is the cause of the crisis.”

     

  • Fuel: Buhari rejects marketers’ demand for price increase

    Fuel: Buhari rejects marketers’ demand for price increase

    THE DEMANDS

     

    • Price increase
    • Total deregulation of petroleum products
    • Payment of outstanding subsidy

     

    FG’S OFFERS

     

    • Creation of special window for Forex from CBN
    • Presentation of request for payment of outstanding subsidy to National Assembly
    • Creating opportunity for the establishment of modular refineries
    • No return to era of fuel subsidy

     

    A subtle move by marketers for the federal government to increase fuel price appears to have failed.

    President Muhammadu Buhari is not disposed to the proposal, The Nation gathered yesterday.

    He is also saying No to the re-introduction of fuel subsidy, sources said.

    The pressure on government to effect a rise in petroleum price from N145 per litre is coming amidst the current acute fuel scarcity across the country.

    Hundreds of thousands of motorists, for the fifth day running yesterday, kept searching for petrol wherever they could get it at any cost.

    Commuters, many of whom went shopping for Christmas, were made to pay high fares for transport to their destinations.

    Many others had to walk long distances.

    Well placed government sources said the administration is concentrating on finding permanent solutions to the recurring fuel crisis including checkmating sabotage by some marketers and stakeholders, and putting all the nation’s 23 depots in 100 per cent shape.

    It was gathered that marketers are still unwilling to import products because of low or insignificant profit margin.

    They are seeking full deregulation of petroleum products.

    Key players in the petroleum industry attribute  the fuel crisis in the country to agitation for price hike by marketers, disruption of the supply chain, and sabotage by some stakeholders to force the government to deregulate the sector further.

    One of the sources said: “The key issue is price war. The marketers have made representation to the federal government and the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu to allow price hike of petroleum products and leave the sector to market forces.

    “The President and senior government officials are however opposed to price hike because of its spiral effects on the socio-economic life of the nation. It also has grave political implications for the survival of the present government.

    “In the last few months, the government has been trying to cope through the Nigerian National Petroleum Corporation (NNPC) until there was stress in the supply chain following threats by PENGASSAN and the challenge in Lagos.”

    Another stakeholder, speaking on the price war, said: “We import refined products as a nation. Once the prices of crude increase at the international market, they have effects on the cost of refined products being brought into our country.

    “The landing cost of Premium Motor Spirit (PMS) is between N165 and N170 per litre. The marketers are claiming that the profit margin is insignificant and they cannot recover cost, they say they need to top up prices since they no longer enjoy subsidy.

    “Initially, the same marketers said they had subsidy arrears to collect from the government and they will not import products. The arrears have not been appropriated for by the National Assembly and there was nothing the government can do.”

    But a government source said:  “To mitigate the issues raised by the marketers, this administration put some measures in place. For instance, the government created a special foreign exchange window for the marketers to enable them to import products.

    “Instead of using the forex, some of them diverted it to other use. In order not to hold the nation into ransom by the marketers, NNPC in the last one and a half years has been importing 99.9% of products. This sole importation also drains the resources of NNPC but it has to sacrifice to ensure availability of products.

    “And if NNPC imports, it sells to marketers but they are still complaining of low profit margin. The importation chain has its own stress because for the storage of the products, NNPC can only accommodate 55% of the products. The oil majors cater for 30% and independent marketers take charge of about 15%. So, at any point, these marketers are still needed.

    “The alternative is for all the nation’s 23 depots to be operating at maximum capacity to check the antics of the marketers.”

    A minister, who should know, also said the government was suspecting sabotage by some stakeholders.

    His words: “Before the present crisis, the nation used to consume between 30million to 35million litres of Premium Motor Spirit (PMS) daily but since this current challenge started, the consumption has  shot up to 80million litres per day.

    “Without a soothsayer, it is obvious that something had gone wrong. We cannot just rule out sabotage including diversion of products.”

     

  • Ekiti monarchs, elders intervene to stop fuel crisis

    Ekiti monarchs, elders intervene to stop fuel crisis

    The Ekiti State Council of Obas and Council of Elders have intervened to end a three-week scarcity of petrol in the state sparked by a row between Governor Ayo Fayose and members of the state chapter of the Independent Petroleum Marketers Association of Nigeria (IPMAN).

    The national leaderships of IPMAN, Petrol Tanker Drivers (PTD) and National Union of Petroleum and Natural Gas Workers (NUPENG) had ordered stoppage of fuel supply to Ekiti over the alleged victimisation of petrol leaders by Fayose.

    The monarchs and elders held a peace meeting with petrol leaders yesterday at the palace of the Ewi of Ado-Ekiti, Oba Rufus Adeyemo Adejugbe, in an attempt to save the state economy from collapse and bring relief to residents who now purchase fuel from neighbouring states.

    A source who was part of the meeting told The Nation that petrol dealers insisted that the state government must renovate three filling stations destroyed by suspected thugs before an amicable resolution of the crisis could be struck.

    The communiqué read: “We observed with regret, the disagreement between the state government and the fuel marketers leading to total shut of all petrol stations in Ekiti. We appeal to the parties to shift grounds because the lingering crisis was stifling the economy and causing serious pains to our people.

    “We want them to accelerate the process of reconciliation, so that acceptable terms for quick resolution of the crisis will be reached as soon as possible.”

     

  • Afenifere demands solution to Ekiti fuel crisis

    Ekiti State chapter of Afenifere, a pan-Yoruba socio-political and cultural organisation, has admonished people to pray to God to intervene in the fuel crisis that has paralysed commercial activities.

    It advised Governor Ayo Fayose to find solution to the problems afflicting the state rather than attacking President Muhammadu Buhari.

    The group, in a statement yesterday by the Chairman, Elder Yemi Alade and Publicity Secretary, Chief Biodun Akin-Fasae, said: “It is shameful that Ekiti has become a butt of uncanny jokes and fast sliding to be a pariah among other states, despite its God-given endowments.”

    The statement titled: “God, Heal Our Land”, said the scarcity of fuel unleashed on the citizenry by the governor’s face-off with petrol marketers could have been resolved by dialogue and not resort to strong arm tactics, which culminated in the destruction of filling stations by suspected thugs.

    Afenifere said: “Economic activities in the state have been grounded following executive misapplication of strategic management of human and business relationship. Now, no one is sure of what happens next because of the misunderstanding between the government and fuel marketers, which has degenerated into chaos.

    “This has been going on for two weeks. Unfortunately, the government is feeling comfortable and justifying its strategy by pulling down petrol stations for flimsy excuses, which not a few have interpreted as mere political vendetta and braggadocio on the part of the government.

    ”Our suggestion is that impunity to destroy economic livelihood of people should stop because we believe no fuel marketer approved for himself the construction of a filling station.”

     

  • Ekiti fuel crisis: Elders seek extension of Fayose’s ultimatum

    Ekiti fuel crisis: Elders seek extension of Fayose’s ultimatum

    The Ekiti Council of Elders has called for the extension of the ultimatum issued by Governor Ayo Fayose to oil marketers to allow for intervention in the two-week faceoff.

    The council at its emergency meeting on Thursday in Ado-Ekiti expressed concern with the development which they described as “worrisome.”

    In a statement issued at the end of the meeting signed by the council’s Chairman, Prof. Joseph Oluwasanmi and General Secretary, Niyi Ajibulu appealed to marketers to commence sales of the commodity to the public.

    The statement reads: “The Ekiti Council of Elders at an emergency meeting today, Thursday, 25th May, 2017 noted with concern the worrisome development in the fuel crisis in Ekiti State.

    “The Council equally noted the ultimatum for the reopening of the fuel stations and the stand of the operators. We appeal for calm from all stakeholders, the government, the petroleum dealers, the drivers and the governor for the extension of the ultimatum in order to give the Council the opportunity to intervene towards an equitable settlement of the impasse.

    “The Council is fervently appealing to the marketers to commence sales of the product in the wide interest of the public which they normally serve.”

  • Fuel crisis… Why deregulation is the only way out

    Fuel crisis… Why deregulation is the only way out

    The discussion on the deregulation of the downstream sector of the Nigerian petroleum Industry has been on for decades without any visible decision in sight. The sorest point around the issue is the debate for the removal or sustenance of subsidies for refined products.

    You would want to think that Nigeria being the largest producer of oil in Africa and the 5th largest exporter of the product in the world would have a clear stand on the way forward for such a crucial industry, but alas the country is neither here nor there on the issues of deregulation

    In one breath the government says it has deregulated the market partially, yet same government does not want to rule out the continued payment of subsidies. This to me is a sign of indecision on a critical issue such as this.

    Since deregulation was a major point of discussion during the last election campaigns, I would have thought the Buhari led APC government would have taken time out to debate  the issues surrounding deregulation deeply within its ranks and take a decision once and for all.

    The inability of previous governments to be decisive on this issue is part of the reason why growth in the sector in Nigeria is stunted. We cannot afford another round of policy uncertainties. The Buhari government has to come out clear, if his government will fully deregulate the downstream sector of the oil industry or not.

    Nigeria in the last five years  has consistently spent over 1 trillion naira that is about $5b USD  annually on petrol subsidies, same country that spent less than 20 billion naira on roads  in the year 2015, but spent over 1 trillion naira on petrol subsidies in same year is unacceptable.

    The major reasons given by those who resist the deregulation of the downstream sector of the oil industry is that subsidy on petrol will be removed and pump price of petrol will go up. Whilst that may be true initially, the side of the story they however don’t talk about is the benefits of deregulating.

    The deregulation of the downstream sector will open up the sector to private investors who hitherto developed cold feet to investing in the sector due to heavy government interference. Those who have had refining licenses approved several years ago will now go ahead to build the refineries, this will tackle the incessant scarcity of petrol due to importation. Petrochemical industries will spring up alongside local refining; these will create jobs and jobs and jobs unlike what we have now where jobs are being exported to countries where we refine our petroleum products.

    We will save the economy the unnecessary pressure put on the Naira due to the heavy demand for FOREX to fund the importation of petroleum products rather we will be exporting refined petroleum products thereby earning foreign currencies to shore up our reserves.

    The bone of contention for those against deregulation is the fuel subsidy regime that the government runs. This group has argued that the masses hardly benefit anything from the government hence their insistence on the government keeping the subsidy.

    Whilst I am not against subsidies in general, I however have a problem with a blanket subsidy that cannot be measured or directed at a particular target group.

    Different revelations have emerged of massive fraud in the fuel subsidy process, trillions of naira are alleged to have been fraudulently stolen from the government purse in the name of fuel subsidy payments. It is heart wrenching to discover that the country is being bleed on the side despite its already anemic financial status.

    For a country that is deficient in almost all critical infrastructures, paying over a trillion naira annually on petrol subsidies does not make sense. Such monies if spent on critical sectors such as health, education, policing, roads, railways etc. will impart the lives of the citizenry more than whatever impart the Petrol subsidy is having on their lives at the moment.

    Let’s imagine for a moment, that we spent the over one trillion naira which is about $5b dollars we were handing out to subsidy contractors annually in the last 5 years on our health sector, I can bet we would by now probably have a better health sector than any country in Africa and probably be competing with some European countries in quality healthcare.

    If we consistently spent $5 billion on our health care in the last five years as we have done on petrol subsidies, we would have created more than 500,000 quality jobs: from those building the new hospitals, to those who will work as medical staff, administrative staff, support staff, contractors, suppliers and others. We would have saved lives; we would have reduced the demand for foreign currency to go on medical tourism, thereby reducing the pressure on the Naira.

    What of our ailing education sector , Poor road networks that continue to kill thousands of citizens yearly , just imagine for a second that each of these sectors got a trillion naira each to spend in a calendar year , can we imagine the transformation that would happened in this sectors.

    We simply cannot continue to shy away from the realities that stare us in the face. We not only need to deregulate we need to do it fast. Nigeria has wasted too much time on this road of indecision. We now have to take the bull by the horn. Though deregulation may not be that one single silver bullet that solves all of our problems, one sure thing is that it will grow the oil industry like we have never experienced since the discovery of oil.

    It is time we did the next big thing after the great telecoms revolution that came with the liberalisation of the sector in the early 2000s. I can predict that the boom economy will experience with the deregulation of the downstream oil sector will make the telecoms experience a child’s play.