The Nation Newspaper

Tag: fuel

  • Marketers: 2.2 million vehicles hit Lagos for fuel

    No fewer than 2.2million vehicles came to Lagos in search of fuel, The Nation has learnt.

    According to the Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN), Obafemi Olawore, the figure would have been higher had the Federal Government not made efforts to halt the trend.

    He said the figure represents the number of vehicles that came from different states in search of fuel at a relatively cheaper price. He said motorists from other states decided to come to Lagos to buy fuel, following their inability to get the commodity at between N150 and N200 per litre from the black market.

    While stating marketers’ position on the lingering fuel scarcity during a meeting organised by the Products Petroleum Marketing Company (PPMC) to proffer solutions to the issue, Olawore said the number of vehicles that came to Lagos to buy fuel  increased by one million from 1.2million to 2.2million.

    He said: “Lagos officially has 1.2million vehicles on its roads.  However, the figure has increased greatly, due to influx of vehicles into Lagos from other states. Findings have shown that the number of vehicles that flowed into Lagos at the height of the ongoing fuel scarcity has increased to 2.2million. The reason is that fuel is normally scarce outside Lagos, so whenever problems occur in the supply/demand chain of the petroleum product, the only option left for fuel users, especially owners of vehicles is to come to Lagos to buy fuel.”

    Olawore said it is extremely difficult to ensure a steady supply of fuel in Lagos, despite efforts made by the government to solve the problem. He said Nigeria will achieve positive results in the area of fuel supply when one considers the huge volumes of fuel imported into the country by the Federal Government in recent times.

    In a related development, the Executive Director, Supply and Distribution, PPMC, Mr. Justin Ezeala, said arrangements are being made to remove major oil marketers from the Nigerian National Petroleum Corporation (NNPC) fuel importation programme, adding that such marketers would start importation of fuel into the country soon.

    He said marketers would bring cargoes of fuel into the country once they firm up arrangements with some international organisations that will supply them with foreign exchange for fuel importation.

    Lagos is noted for its huge vehicular traffic. Being the nation’s commercial nerve centre, Lagos is used to traffic as vehicles flowed into the city from different parts of the country. However, Lagos recorded an unprecedented vehicular traffic in the last three weeks, due to fuel scarcity.

    Though the government had taken delivery of seven cargoes of fuel last week end and also promised to import more fuel with a view to make the product available to users, the problem persists.

  • Why fuel scarcity persists

    Fuel scarcity and long queues are not new to Nigerians, but lately, the situation has become worrisome to the extent that the lowly and the mighty complain. Valuable man-hours are being spent at retail outlets; people park their vehicles at fuel stations overnight, engage in fisticuffs, all in their bid to buy fuel.

    However, major causes of the lingering and seemingly intractable fuel scarcity include policy error, marketers’ lack of patriotism and greed.

    The Petroleum Products Pricing Regulatory Agency (PPPRA) initiated the misstep when it advised the government to assume the sole status of fuel importer even when it knew that the government through the Nigerian National Petroleum Corporation (NNPC) had limitations in terms of logistics, storage facilities and distribution network. The allocation of 78 per cent import of the country’s total consumption to the NNPC was ill-advised by the PPPRA. It was a serious pricing policy somersault, and the timing was also wrong.

    The most regrettable of the situation is that Nigerians are suffering from the biting fuel shortage at a time the world is paying less for the same product, with oil producers seeking ways to stem oil glut and low price.

    The Nation gathered that due to low oil prices at the international market, the Federal Government enjoyed uninterrupted five months of over-recovery in line with the PPPRA pricing template. Over-recovery is simply a period when the landing cost of imported fuel is far less than the subsidy level (the open market price or pump price).

    Therefore, within the five months (November 2015 – March 2016), the government made at least N4.20 on every litre of fuel imported. When this is multiplied by the 40 million litres estimated to be the national daily consumption, government would be saving N168 million daily. With this level of saving, the government should not be talking about subsidy now as the savings suppose to offset the current increase in price of importation, following a marginal increase in price of crude oil.

    Considered from whichever angle, the PPPRA misled the government.  The NNPC imports and stores the product in privately-owned depots and pays N3 on every litre. It distributes the product to privately owned retail outlets and pays the marketers some margins for using their facilities. It also pays demurrage for delays in discharge of their imports at the ports. Cargos brought in by NNPC are not cleared speedily like those of the private marketers.

    PPPRA’s advice could have worked if the refineries are working.

    Besides, the Central Bank of Nigeria (CBN) is a member of PPPRA Board. The institution failed to advise the government on the need to issue foreign exchange (forex) to the marketers, knowing that the non-issuance of forex would discourage marketers from importation.

    The PPPRA position was that if NNPC alone imports, government will not pay subsidy, a decision that compounded the fuel supply situation.

    What the CBN ought to have done was to offer forex to the marketers, but effectively monitor and track the deals to ensure that such forex were not diverted.

    Some members of the Major Oil Marketers Association of Nigeria (MOMAN) also cashed in on their lack of access to forex and decided to sabotage fuel distribution by diverting supplies from NNPC to areas where fuel is sold at very high prices.

    In some instances, they sell off the fuel allocated to them at the depot to independent marketers, who are willing to pay more because they sell above the regulated price. They also supply to dealer-owned filling stations, branded in their names. These dealers are independent marketers, whose filling stations bear the brand names of these major marketers.

    But, with the latest sharing of import allocation of 41.73 per cent to NNPC and 58.27 per cent to marketers and the decision of the International Oil Companies (IOCs) to make forex available to importers , there are hopes that normalcy will return to fuel distribution in a few days.

  • Fuel scarcity ends in few days, says NNPC

    Fuel scarcity ends in few days, says NNPC

    The Nigerian National Petroleum Corporation (NNPC) yesterday assured that ongoing fuel scarcity in the country would be a thing of the past in the next few days.

    Its Chief Executive Officer (Upstream), Bello Rabiu, gave the assurance while briefing State House correspondents at the Presidential Villa, Abuja, while giving an update on the supply and distribution situation of the product.

    Flanked by the Chief Operating Officer (Downstream), Henry Nkem-Obi; Chief Operating Officer (Refineries), Anibo Kragha and Group General Manager (Public Affairs), Garbadeen Mohammed yesterday, Rabiu said  the NNPC will soon flood the market with more petrol than the nation can consume.

    According to him, five vessels were already discharging products in various parts of the country.

    Aside this, he said private importers were also discharging at least 120 million litres of the product to complement NNPC’s imports.

    The only delay now, he said has to do with circulation of the products across the country using trucks as pipelines were still not in good condition.

    He said: “The plan going forward from today, we want to make sure that we give more than what is required in the whole country; the total requirement of the country is just about 1,300 trucks but our plan is to make at least 1,500 available everyday until this thing clears up.

    “So, we want to make sure that we saturate the market in a very short time and I think you can see clearly now that Lagos is almost cleared and Abuja is getting better. Other places will follow.”

    Rabiu said the country was spending about $1.8 billion per quarter to import fuel.

  • Fuel and light

    Fuel and light

    These are nuts Buhari must crack

    “Waaater, lightii, foooodu, houseee, wetin do them; you mean you no know? I go tell you …” That was the legendary Fela Anikulapo-Kuti in one of his albums in (I guess) the 80s. The thing wey do dem when Fela sang that song still dey do them today. That is whay I laugh whenever they say the National Council of State wants to meet to deliberate on (to use their expression) “how to move Nigeria forward”. Were they not the same people that brought us to our sorry pass? But, can Buhari make the difference? Can he make Fela reverse himself in his grave? Time will tell.

    But, if ever there is a time Nigeria should not be having the problem of fuel and light, it is now. The weather is rather harsh. Unfortunately, Nigerians have been living  without light and fuel, with the supply of  the latter becoming so unpredictable, especially in the last two months. In those days, food, water and shelter were classified as man’s basic needs.

    But man’s needs have transcended these basic three. In modern times, fuel and light have also assumed importance. Indeed, in many countries, they are taken for granted. But they have, unfortunately, become issues in a place like Nigeria due to lack of planning, lack of foresight on the part of successive governments, and corruption, especially in high places. All these have been compounded by the docility of Nigerians who have come to accept their fate in the hands of these irresponsible governments with philosophical equanimity.

    One particular aspect of the fuel crisis that is disturbing is seeing Nigerians carry generators, sometimes on their heads to filling stations. A caller on Lagos Traffic Radio made a vital point on Thursday during discussion on the ongoing fuel crisis. He asked if the person who banned sale of petrol in jerry cans has generator that uses petrol. It was a rhetorical (even if instructive) question that I am sure he himself did not expect the presenter of the programme to answer. But the point was well made because banning sale of petrol in jerry cans is not necessarily the issue. Without doubt, many of those buying petrol in jerry cans do so in order to resell at cut-throat prices just a few metres away from the filling station where they bought it.

    But many too do so in order to be able to power their generators at home or in their various offices or shops. Now, can we quantify the losses of artisans and people in offices who have been denied both electricity from the national grid and still cannot use their generators because government has banned sale of petrol in jerry cans (even when they are ready to buy the fuel at exorbitant prices)?

    We have not even talked about people who require petrol for their generators for relaxation, and more importantly to power their fans, to cushion the harsh effects of the hot weather. In a typical tropical climate like ours, it is no luxury for someone to make arrangement for his private electricity supply for such purposes when public power supply is unreliable. So, after a hectic day’s job, one would still get home to experience the frustration of not being able to power one’s generator because government has banned sale of petrol in jerry cans. It may not be the intention of the government to punish Nigerians by this ban. Unfortunately, that is what it has turned out to be, and that is why I said Nigerians are docile. In some other places, such frustration is enough to make people troop to the streets. Government that has failed in its minimum responsibility of providing fuel has now turned round to impose the maximum punishment on hapless people whose only misfortune is their inability to have good governance all these years. You need to be at the filling stations to hear uncomplimentary comments from people who keep vigil there to buy petrol.

    Rather than ban outright sale of petrol in jerry cans, what the government should do is limit the quantity of petrol any individual can buy in jerry cans, at least to make room for some of the other purposes I highlighted. It is not everyone that buys petrol in jerry can that wants to resell. Indeed, petrol attendants know those who buy and resell, and many of them would not hesitate to sell as many jerry cans for those people as they want because they know they would make a lot of money from them. I witnessed one such experience at the Mobil filling station near Pleasure Bus Stop on the Lagos-Abeokuta Expressway on Friday. After waiting to buy fuel from about 5.30 a.m. to past 12 in the afternoon, they did not start selling until around 9.00 a.m. They said they had to wait for their chairman who probably was still snoring at the time many of us had left our beds for his filling station. When they eventually started to sell petrol, they focused on people who came with as many as seven jerry cans of about 25 litres in their car boots and back seats!  This was after an ‘alfa’ (I did not know whether he was their employee) had announced to us all on their behalf that they would not sell fuel in jerry cans! This naturally led to self-induced chaos that made them stop selling fuel. I left the place frustrated after waiting in vain on queues that hardly moved.

    Moreover, rather than ban sale of petrol in jerry cans, why can’t security agents arrest those who buy and resell at the black market since they do that in the open, if the idea is to discourage the practice, rather than make everyone pay for the sins of an insignificant few?

    Yes, the argument that it is dangerous to have fuel in jerry cans is valid, but even when there is no fuel scarcity, people have always bought petrol in jerry cans because they must power their generators either at home or to run their businesses. The best way the government can show concern for the sanctity of lives in the country is by creatively and systematically thinking out of the box to solve the problems of power and energy. No one in his right senses would buy petrol in the black market if there is fuel at the filling stations. It is an eye sore seeing Nigerians carry generators to filling stations on their heads or on ‘okada’ ; indeed, it is a national shame and embarrassment that this is the situation in a major oil producing country.

    However, let nothing I have said be misconstrued as blaming the Muhammadu Buhari administration for the mess in the energy and power sectors. Just as I am not in league with especially the Peoples Democratic Party (PDP) members who are asking the government to perform instead of fishing for excuses in the erstwhile ruling PDP. It is not their fault; that is the kind of thing you see in a country where values have gone to the dogs. Many of these people in a place like China would have been rotting away in their graves. The lucky ones among them would be eating dry beans and maize in the prison by now!

    My mission, however, is to let the government know the enormity of the energy and power conundrums. Light and fuel have become to us today what food, water and shelter were in the past. Even the GSM phones to some people are indispensable such that if they forget them at home, they are uncomfortable until they are able to lay their hands on them again. The seeming intractability of the crisis is something that many Nigerians do not find funny. That explains why some of them are beginning to ask, and so early in the day, whether they made the right choice during the last general elections. This is a statement induced by frustration and it is quite natural. It is intolerable that the power system would collapse twice in less than two weeks. If the Buhari government discovers that it was bequeathed a ‘one chance’ power sector, it should do away with it. The solution, as many of us have always argued, is not necessarily about raising tariffs. The government would also do well to realise that neither the scorching heat nor the sleeplessness occasioned by vigil-keeping at petrol stations is a friend of the body. And it should resolve that never again would such a thing repeat itself. No explanations would do, because there is no explanation that can sufficiently comfort the child whose mother was killed by a wolf.

  • IPMAN disowns fuel scarcity claim

    IPMAN disowns fuel scarcity claim

    The National Operations Controller and immediate past National Secretary of Independent Petroleum Marketers Association Nigeria (IPMAN), Mr Mike Osatuyi has debunked a report that the association was responsible for the fuel scarcity. The report was credited to  Mr. Lawson Ngoa, who claimed to be the interim management secretary of IPMAN.

    Osatuyi in a statement after IPMAN’s national executive council (NEC) meeting in Abuja, said Lawson Ngoa is not a member of IPMAN, but an agent of the Ministry of Petroleum Resources brought in to mediate in the internal crisis of IPMAN.

    He said while the intervention of the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu in resolving the internal crisis in IPMAN is appreciated and commendable, the forefathers, past presidents, leaders of IPMAN and the general members of IPMAN nationwide will not allow Mr. Lawson Ngoa, who is not a marketer let alone being an IPMAN member, to use IPMAN’s name as a shield to defend or protect a system failure of the Nigerian national Petroleum Corporation (NNPC).

    He said: “It is pure defamation of IPMAN’s name to go on air that IPMAN has accepted the responsibility for the scarcity of petroleum products and that Nigerians should hold IPMAN responsible for the scarcity. Crisis in IPMAN with government’s intervention is not new.  Previous government agencies have intervened in IPMAN crisis without blackmail from the agencies concerned right from the time of Alhaji Jarfau Paki, the then Special Assistant to President Olusegun Obasanjo on Petroleum Matters, Dr. Oluwole Oluleye, the former Executive Secretary of Petroleum Products Pricing Regulatory Agency (PPPRA), had intervened in IPMAN matters without blackmailing the Association.

    “Some former Managing Directors of Products and Pipeline Marketing Company (PPMC) had also intervened in IPMAN matters without destroying IPMAN’s name. IPMAN controls over 80 per cent of the retail outlets in the country and IPMAN has partnered with previous governments to solve previous fuel crisis without damaging the association name.”

    He continued: “It is also on record that no member of IPMAN has voiced out against peace since this government stepped in to resolve its crisis few days ago. That is evidence that IPMAN and all members want peace and are ready to embrace peace for seamless operation of the association’s administration and by extension the Nigerian oil industry.

    “IPMAN doesn’t want any government agents, representatives, coordinators that will add more wound to the association’s injury or destroy the association’s name that was established over 35 years ago. IPMAN members nationwide have invested trillions of Naira in the Nigerian downstream oil sector.

    He added: “Lawson is not aware or knowledgeable of the gravity of his statement to IPMAN and Nigerians who are suffering for weeks for somebody’s system and planning failure. It is unfair statement and he has to apologize to IPMAN and Nigerians for deceiving the populace.

    “Lawson should tell the public if IPMAN issues import permit, allocate foreign exchange (forex) for import, or involved in import planning of NNPC and import allocation formula, among others? He has no authority or mandate to use IPMAN’s name to shield any of the government agencies for any operational or administrative mismanagement. IPMAN is ready to work with the government in ensuring products availability.”

  • NLC plans one-day strike on fuel, power crises

    The Nigeria Labour Congress (NLC) yesterday resolved to go on a one-day warning strike over the state of the nation, especially the increase in electricity tariff and ongoing fuel crisis.

    Its President, Comrade Ayuba Wabba, lamented that the response to the prevailing economic situation by all the tiers of government in the country has been a source of worry for many Nigerians, especially the  workers.

    In an address to the opening session of the Central Working Committee (CWC) meeting of the congress in Abuja yesterday, Wabba said Nigerians are feeling the harsh realities of the economic crises in the country.

    Specifically, the NLC president decried the unjustifiable 45 per cent increase in electricity tariff, saying the increase was “illegal, unfair, unjustifiable and a further exploitation of the already exploited Nigerians.”

    He pointed out that the due process in the extant laws for such an increment was not followed in consonance with Section 76 of the Power Sector Reform Act, 2005.

    Wabba said there has not been any significant improvement in service delivery coupled with the fact that most consumers are not metered in accordance with the signed Privatisation Memorandum of Understanding (MoU) of November 21, 2013 which stipulated that within 18 months gestation period, all consumers are to be metered.

    He regretted that despite the national action organised by the congress in the 36 states of the federation including Abuja, which was adjudged successful, the intervention of the National Assembly and especially the Senate President who received the protesters at the National Assembly premises in Abuja, the power firms remained adamant.

    According to him, the privatisation of the power sector was done in bad faith and it has become obvious that the investors do not have the capacity to improve power generation and supply in the country.

    He said the CWC will agree on a day to embark on the strike, because according to him, several actions promised by the Federal Government to checkmate the tariff increment have not been implemented.

    He said: “While the process is on, the tariff increase has remained, and under a worsening power supply situation. Not a few Nigerians are groaning under this burden. Not a few of them look to the Congress for a solution.”

    On the issue of fuel scarcity, he pointed out that when the first incident occurred  under this government, “we put it to sabotage and urged the government to deal decisively with the saboteurs but with an eye to enhanced local production as an enduring solution. When the second incident happened, we similarly reasoned the same way.

    “However, with the latest incident of prolonged scarcity and confession by the Minister of State for Petroleum Resources that scarcity will persist till May as he is not a magician, regular scarcity might as well  be a familiar feature, and we would do well to brace ourselves for long spells, except government does the needful.

    “We must however make the point that spells of scarcity will not be acceptable to Labour and other Nigerians  because the human and economic costs are unimaginable.”

  • Fuel arrives at Lagos ports to end scarcity

    Fuel arrives at Lagos ports to end scarcity

    The Products Petroleum and Marketing Company (PPMC), yesterday in Lagos, assured Nigerians that the fuel scarcity will end soon in Lagos, Abuja, Kaduna and other cities.

    Speaking during a media parley, which had representatives of major oil marketers in attendance, its Executive Director, Supply and Distribution, Justin Ezeale, said it has become necessary to solve the problems in the badly affected areas of the country so that normalcy could return.

    He said the Federal Government was aware of the  problems arising from fuel distribution in the country, hence its decision to deploy proactive measures on the issue.

    He said seven cargoes of petrol arrived the country on Tuesday for onward distribution to various parts of the country, adding that 294 trucks of fuel were distributed in Lagos yesterday ( Tuesday), while another 336 trucks of fuel would be supplied tomorrow.

    Ezeale said Abuja has got its own supplies as well.

    He said: ‘’The Federal Government has embarked on massive importation of fuel in order to end the lingering fuel scarcity. As at today, seven cargoes of fuel have arrived the country for distribution to major cities. We have taken into cognisance that the country consumes 40milliion litres of fuel daily, and we would ensure that fuel supply goes round the country.

    ‘’PPMC meets with major marketers and representatives of the Federal Government everyday since the fuel crisis started a few weeks ago. The government is feeling the pains going through by Nigerians, hence the decision to meet regularly with stakeholders in the value chain in order to strategise on the issue of ending the fuel problems.’’

    He said the government is engaging the services of the Nigerian and Security and Civil Defence Corps (NSCDC), to monitor the supply of fuel from depots to the filling stations, stressing that the decision was borne out of the need to stop diversion of petroleum products.

    Ezeale said the police has been helpful in this regard, stressing that officials of the NSCDC were drafted into the issue to complement the efforts of the police.

    He warned that selling  fuel above official pump price by   marketers, was wrong, warning that PPMC and the Department of Petroleum Resources(DPR) have sent their officials to various parts of the country to monitor and sanction erring marketers.

  • Early morning fuel buyers rescue woman in labour

    A woman in labour was on Tuesday morning delivered of her baby around Anthony bus stop by well spirited Nigerians queuing for fuel.
    The incident according to an eyewitness, Leo Spartani who shared it on Facebook occurred  before 7am at the VIO/LASTMA office at Anthony Bus stop.
    Spartani explained that after some women took delivery of the baby, fuel buyers contributed money so that mother and child could be taken to the nearest hospital.
    He wrote: “So as I was coming back to my house this early morning,
    I meet an old friend and after a brief chit chat he resumes dialing emergency health services: A lady is in labour at the busstop!
    “A serpentine queue for fuel, it is not yet 7am, and a woman is in the throes of childbirth in urban Lagos. At a busstop, on the floor, surrounded by women with little but their wrappers and the maternal instinct of support for one of their own…
    “These women are running up and down, and the young mother to be is shielded for decency sake away from Lagosian eyes.
    “Calls are being made, some Nigerians are praying whilst keeping an eye on their spaces on the queue, and thank goodness the Lagos madness of unruly bus drivers and the conductors hasn’t started.
    “The Baby is born… And emergency services take the location of the delivery, Anthony bus stop taxi Park by VIO/LASTMA office. They are still coming…
    “The special forces of veteran mothers on the scene assures bystanders that all is well and the baby is wrapped in a clean Ankara,  even as the Oga husband is on his way to the park. There is a conference on the nearest hospital that baby and mother can be taken to…
    “All is well, the mother is still dazed,  but the baby is alive, and Nigerians even in this hard times are already contributing money, unsolicited money to the miracle of a safe delivery at the most unlikely of  unsanitary places for the continuation  of life on our planet… We are that lovely a people…The day feels special already…”
    Spartani’s post which went viral, attracted commendation from readers, who all agreed that Nigerians have human feelings.

  • Gov. Ambode appeals to residents over fuel crisis, power

    Gov. Ambode appeals to residents over fuel crisis, power

    Gov. Akinwunmi Ambode of Lagos State on Wednesday appealed to residents to bear with government over the lingering fuel crisis and power shortage across the state.
    This is contained in a statement issued by the state’s Commissioner for Information and Strategy, Mr Steve Ayorinde.
    “Lagos State consumes more than 40 per cent of the fuel and energy needs of the country and therefore appreciates that the impact of the scarcity would be felt more in the state,” Ambode said.
    He urged residents to remain calm, orderly and law abiding, assuring them that government was doing everything possible within its power to find an immediate solution to the crisis.
    “I share the pain and discomfort of Lagosians.
    “I assure them that the Federal Government is deeply touched by the situation and is working round the clock to alleviate the suffering of the people,” Ambode said.

  • Fuel: Govt bows to marketers as scarcity worsens

    Fuel: Govt bows to marketers as scarcity worsens

    Under pressure to end the lingering fuel crisis, the Federal Government has soft-pedaled on its subsidy payment policy. JOHN OFIKHENUA, reports that filling stations across the country will soon become wet marketers granted approval to import 58.27 per cent of petrol in the new quarter.

    THE biting fuel scarcity may have forced the Federal Government to eat the humble pie on it suspension of subsidy payments to fuel importers.

    Under pressure to end the festering scarcity, the government has spoken of plans to involve members of the Major Oil Marketers’ Association of Nigeria (MOMAN) in the importation of refined petroleum products this quarter.

    The government, through the Minister of State for Petroleum Resources, Dr. Emmanuel Ibe-Kachikwu, announced the suspension in January, a development that made fuel importation unattractive to marketers.

    But, the ‘laudable’ decision turned costly for the government as the Nigerian National Petroleum Corporation (NNPC) which assumed the sole importation of petrol could not meet the consumption demand.

    The minister had expected the marketers to complement government’s efforts, but he missed the point. They shunned importation since the stoppage of subsidies also ended their access to Foreign Exchange (forex) differentials.

    Had the minister anticipated such reaction from the marketers and made a plan for a worst case scenario after the suspension of subsidy payment, the supply gap would not have degenerated to a national embarrassment.

    The NNPC as the sole importer of fuel could not supply the more than 38 million-litre daily consumption requirement of Nigerians. But, the corporation lacked the power to compel the marketers to import fuel, especially with the excuse that they had challenges accessing forex from the Central Bank of Nigeria (CBN).

    Besides, some saboteurs, who catch in on scarcity to undermine the system and make fortunes from black marketing of products have been at their best to ensure frustrate the fuel distribution chain.

    So frustrated was the Minister of State that he once spoke of his inability to magically make fuel available at the filling stations. He gave a May deadline to end the lingering shortage.

    Kachikwu’s “I am not a magician” comment stoked criticisms from Nigerians including the All Progressives Congress (APC) National Leader Asiwaju Bola Ahmed Tinubu, who chided the minister for offering to Nigerians an excuse reminiscent of the old administration.

    The minister had explained that the present allocation has now become insufficient for the corporation that was using the same quantity when it was only supplying 50 per cent of the products. His comment was a request that the NNPC needed to redouble its crude oil allocation in order to meet the demand of the country.

    But, the Federal Government moved at the weekend to tame the monster. It announced an approval by President Muhammadu Buhari for the allocation additional volume of crude oil to the NNPC to guarantee fuel supply.

    Again, the cost modulation for the management of the petroleum products pricing review made overshot the subsiding margin last week as the Federal Government reviewed the prices for the second quarter.

    The implication is that government would now subsidize the petrol by N5.84 per litre, although the Petroleum Products Pricing Regulatory Agency (PPPRA) retained the N86/litre for NNPC Mega Stations and affiliate stations and N86.50 per litre for other marketers.

    The daily consumption of the product will determine how much government will pay as total subsidy but there is an assumption that Nigerians consume about 38 million litres of petrol daily.

    In the new template released by the PPPRA on April 2, the Expected Open Market Price (EOMP) of petrol for other stations was N92.34 per litre, the gap of N5.84 per litre between this cost and the N86.50 per litre is known as the subsidy.

    Since the EOMP for stations in this category was N91.80 per litre as against an official pump price of N86 per litre, the subsidy is N5.80 for NNPC affiliate stations,

    Essentially, the EOMP is the actual cost of petrol without subsidy. It comprises of the landing cost of the product and its sub-total margins like transporters charge, administration fee, dealers cost and bridging fund among others.

     

    Implications of subsidy

    reintroduction

     

    Prior to the reintroduction of fuel subsidy, the corporation had announced that government would be saving N100 billion annually by not subsidising fuel imported by marketers.

    As an immediate remedy to the fuel shortage, the PPPRA also announced the importation allocation of 58.27 to oil marketing firms and 41.73 per cent to NNPC affiliate stations.

    The target is wet all filling stations across the country with fule as soon as possible.

    The NNPC however pointed out on Sunday  that companies  in the upstream oil and gas sector – International Oil Companies (IOC)  will provide forex for the importation of petrol into the country.

    Its Group Executive Director/Chief Operations Officer, Downstream, Mr. Henry Ikem-Obih, made this disclosure after inspecting the sale of fuel in Abuja.

    Ikem-Obih also informed that production of refined petrol will resume at three of the nation’s four refineries this month.

    On measures to tackle the issue of forex for marketers to enable them participate in the importation of products in the  second quarter, the NNPC chief said: “As you know, forex was one of the prime reasons why we didn’t do well in the first quarter most marketers who had allocations could not import because they couldn’t access forex.

    “The minister has worked very closely through his own initiatives with the upstream oil companies. So, we have a number of them onboard with us and they will support the local entities and downstream companies.

    “They will help provide forex for the downstream companies to import and meet their PPPRA allocation. So, through the CBN, NNPC will support importation of fuel in the second quarter and the oil companies too will work with us. With this combined efforts, we hope we will be able to meet the import allocation for Q2.”

    Speaking on the refineries, Ikem-Obih said: “Most of the work being done at the refineries are on site, that is, just getting them ready to start cracking crude so that they too can start contributing to the pool of the amount of fuel we have to distribute across Nigeria.

    “We have to ensure that within the month of April that we have some local refining contributing to the amount of fuel we have to distribute across the country.

    “The work will be across the three locations and they are all at various stages of start-up. And in terms of moving them to their optimal yield, there is a lot of work going on and we are hoping that within this month of April we will also have locally produced fuel as part of what people are buying at the pump.”

    As part of the drive to ensure adequate fuel supply, the NNPC has received bids from nine oil firms interesting in building modular refineries within the premises of the existing national refineries.

    The bidding, according to NNPC, was a demonstration government’s determination through the NNPC to increase the nation’s refining capacity from 445,000 barrels per day to 650,000.

    Kachikwu, who doubles as NNPC’s Group Managing Director, has informed the modular refineries will come on stream to increase local refining capacity that in the next 12 to 24 months.

    His words: “We are vigorously pursuing an improved model for ‘crude oil for refined product’ exchange (the Direct Sale – Direct Purchase arrangement) which eliminates inefficiencies with an attendant cost saving for the nation of about $1 billion. This will guarantee sustainable product supply to the nation.

    “In the medium term, NNPC is working on sustainable strategies to permanently address the issues and challenges facing the midstream and downstream sectors. The over-arching objective is to make Nigeria a net exporter of Petroleum products as was the case in the 1970’s.

    “Our commitment to ramp up our local refining capacity and availability remains un-waivered with the ongoing rehabilitation works targeted at running all Refineries at a minimum 70 per cent capacity utilisation within the next six to eight months.

    “This is in addition to our initiative of increasing the combined capacity of the domestic refineries through co-locating smaller but cost efficient modular refineries within the existing refineries premises within a time frame of 12 to 24 months.

    “To curb storage and logistics challenges, we are working on a joint partnership with technically and financially capable investors to ensure that petroleum products transportation and storage facilities are efficiently operated on an open-access common-carrier user-tariff basis.

    “Some of these Depots will be nominated as strategic reserves while we take possession of a strategic reserve vessel in the next three months. Tangible results will be delivered within the next three to six months.”

     

    The fears

     

    Oil industry analysts believe the government may be taking a risk by approving that the marketers should supply higher volume of petrol. Their reservation is premised on the belief   that the marketers have been part of the sabotage that is holding down the downstream sub-sector.

    But, the Vice President, Independent Petroleum Marketers of Nigeria (IPMAN), Alhaji Abubakar Dankingari, dismissed such fears. He stated that members of his association cannot work against national interest.

    Responding on a telephone conversation, he told The Nation: “Yes, that is how the thing is supposed to be. If they give 58.27 per cent to marketers and NNPC supplies the balance, there will be availablity of products.”

    Faulting claims that marketers are the saboteurs behind fuel scarcity, he said: “Let me speak for IPMAN? There is no how and IPMAN member will start doing anything against the government. It is not possible. This is because we are business people and we are very close to the people and the market. So the information is not true.”

    The allegation that the marketers were sabotaging the fuel supply process emanated from a suspicion that many of the trucks divert fuel allocated to Lagos to other parts of the country where they sell above regulated pump price.

    In Abuja at the weekend, a monitoring team led by the Director of the Department of Petroleum Resources (DPR), Mr. Mordecai Ladan, discovered how some petrol stations hoard products.

    The Oando Petrol Station on Obafemi Awolowo Way, Jabi, beside Karimo Road flyover in the Federal Capital Territory (FCT) was ordered shut by the director for allegedly dispensing adulterated fuel to motorists.

    The management of the station was insensitive to the plights of the motorists in the endless queues and refused to sell its 9,000 litres claiming that all the pumps were faulty.

    But, the DPR enforcement stormed the station following a tip-off, caught the management of the petrol station unaware and wielded the big stick.

    On arrival, the DPR team discovered that although the station had about 9,000 litres of fuel, it refused to sell to customers motorists who had queued up for the product all night.

    Attendants at the station complained that their pumps were faulty and could easily pack up after dispensing product for a few minutes.

    Following the inspection of the pump and the content available in the station, Ladan sealed up the station and said that “for this station, we have almost 9,000 litres on the ground but the pumps are not responding to drawing this fuel from the ground.

    “That means that there is a problem. The problem is that adulteration is suspected. That is why we are calling on the public to withdraw from this station pending when we carry out our investigations. We have sealed it. It is going to be sealed, it is going to be quarantined until the necessary inspection and assessments done and we now know how to go from there.”

    The saboteurs, according to sources, often collude with DPR and NNPC officials who have stakes in most of the petrol stations across the country.

    A source said: “They feed the station managers with information on whatever plans the government has and how to circumvent it. For instance, while the DPR team was on its way out to monitor the fuel situation in some Abuja petrol stations, some members of staff had already allegedly sent out text messages to the station managers to readjust the pump prices to official the rates.

    “Similarly, most of the security agents assigned by the Federal Government to enhance orderliness at the stations are there to pursue their personal interests. The Oando station that the DPR sealed last Friday did all its sharp practices with the protection of the policemen that were supposed to protect public interests.

    “At a point, one of the armed mobile policemen was attempting to protect the manager from attending to the DPR team.

    “With the insistence of Mr. Ahmed Alaku, an Asstistant Director, Operation, at the Abuja Zonal Office, the monitoring team was able to overcome the overzealous cops.

    Also last Sunday, as some motorists queued up patiently at the NNPC mega station on Olusegun Obasanjo Way in Abuja, some irate youths aided some taxi drivers to jump the queue under the watch of policemen and Nigerian Security and Civil Defence Corps (NSCDC) personnel.

    The Nation learnt Pipelines and Products Marketing Company (PPMC), allocates products to marketers for sale at the same official pump price in the hinterland, but that the shylock businessmen sell above the approved pump price.