The nation has had series of fuel scarcity two months in a row this year fueling fears that this may yet linger due to lack of political will by the federal government to address the challenges headlong. In this report Ibrahim Apekhade Yusuf examines the issues
Massively long queues at filling stations hitherto considered a thing of the past, have now become a spectacle to behold these days, especially in the last few weeks across the country as oil marketers square up with the federal government in subtle protest over delayed payments of subsidy claims among other legion of reasons.
Signs that the country would probably face a hard time were visible at the twilight of last year, no thanks with the plummeting price of crude oil in the international market.
The drop in the international crude oil price from $115 per barrel in June 2014 to less than $60 per barrel, the expected market price of Premium Motor Spirit (PMS) or petrol also dropped from N141 per litre to N97.90, prompting the federal government to reduce the official pump price from N97 per litre to N87.
Crux of the matter
Although the news media was abuzz with speculations from members of the political class that the probable cause of the current fuel crisis was the handiwork of so-called opposition political parties, investigation by The Nation revealed that the major cause of the current fuel scarcity was due in part to the capital expenditure differentials, lack of subsidy payments and the fact that banks refused to open letters of credit to oil majors involved in the importation of oil into the country.
Corroborating The Nation, the Executive Secretary, Major Oil Marketers Association of Nigeria, Mr. Obafemi Olawore, one man who should know better gave a bird’s eye view of what led to the present crisis in the oil sector.
Speaking in a monitored television magazine programme in the Federal Capital Territory, Abuja, Olawore, attributed the current fuel scarcity to a constellation of factors, chief among which include problem of nonpayment of subsidy claims, devaluation of the naira, etc.
Dispelling reports of sabotage in some quarters, Olawore said: “We don’t sabotage anybody. We’re private companies and our job is just to bring in products and sell. We’re not interested in anybody, we’re not politicians. The word sabotage we want to beg anybody that wants to use it to forget about it. We’re private individuals. We sell at a price approved by government and in the process, there is a subsidy. The subsidy comes up because we’re not selling at the price we buy the products. So, we need to get compensated and at the right time.”
Remote cause of fuel crisis
The Nation gathered that the situation was made worse by the agitation of independent marketers that the federal government needs to pay them the difference occasioned by the sudden reduction from N97 to N87 per litre. The marketers had claimed to have imported fuel earlier based on the N97 price and had expected to be reimbursed.
To make good their threat, they have resorted to hoarding the product, thereby creating artificial scarcity.
Investigation by The Nation revealed that most filling stations now open at night and sell at N100 per litre. Techno, Oando and MRS filling stations on Ojodu-Abiodun Road, by Ojodu Berger area of Lagos. Vehicles were parked along the road hoping to get the product, while the attendants refused to comment on the situation.
Speaking at another occasion, Olawore said the marketers had no hand in creating the suffering caused by the non-availability of petroleum products.
Apparently rising in the defence of the marketers, he argued that: “The unfortunate situation in which we find ourselves is that as the price of crude oil was dropping – as the international price of diesel was dropping, we devalued the Naira.”
He said the lingering scarcity was caused by the inability of marketers to import petrol into the country since February due to the non-payment of arrears of subsidy claims amidst rising costs.
He said the federal government had yet to fulfil its promise to pay the first batch of marketers, adding that the marketers were not importing the product again because they had not money, and the banks were not ready to give additional loans when the ones earlier collected had not been repaid.
Reality bite
The fuel crisis across the country is growing worse, as most of the petrol stations were shut down leaving motorists stranded.
While the pump price of the product had risen to N120 per litre in most filling stations in the Federal Capital Territory, the few stations that had petrol in Lagos sold for between N100 per litre above the official price while some sold the official pump price with some of the attendants in those locations charging extra N100 or more to sell to prospective motorists, especially at wee hours.
Like Lagos, motorists in southwestern states of Ogun, Oyo, suffered untold hardship as most filling stations were closed for business thereby causing a stampede in the few stations opened for business.
The queues worsened the traffic situation in most parts of the states, with large number of commuters waiting for buses at various bus-stops.
Petrol stations in Abuja and Port Harcourt, The Nation gathered, sold the product at N120 per litre last Wednesday as the scarcity of the product worsened in the two cities, leaving hundreds of motorists stranded.
This was in spite of claims by the Nigerian National Petroleum Corporation, NNPC, that it is injecting about 688 million of Premium Motor Spirit, PMS, into the market. Motorists had to resort to the black market, where roadside petrol sellers now sell the commodity for as high as N250 per litre.
Living in denial
Obviously playing to the gallery, the Minister of Finance, Ngozi Okonjo-Iweala was reported to have said that the current fuel scarcity plaguing the country is not the fault of the federal government.
Okonjo-Iweala added that pipeline vandalism and logistics were to blame for the long queues being witnessed in petrol stations around the country.
The minister stated this last Tuesday, during a meeting with journalists in Abuja.
Okonjo-Iweala also denied reports that a delay in paying claims to marketers was responsible for the scarcity.
“Government is very concerned about the fuel queues which have appeared in Lagos, Abuja and other parts of the country,” the minister said.
“As Nigerians can attest, the Petroleum Ministry and Nigerian National Petroleum Corporation, NNPC, have worked very hard to give out the message that there is no need for panic buying and that it is trying to reduce the queues to the barest minimum,” she added.
“I want to emphasise that contrary to some unfounded speculations, the queues are not caused by payment issues. As you know, we paid the marketers a total of N320.8 billion from the Excess Crude account in two installments in December last year,” the minister said.
“This underscores the fact that we are taking payment of marketers very seriously indeed. We’ve been in constant touch and talking with the marketers and a week ago we reached an agreement with them on their core concerns which we have addressed,” she added.
Cushioning effect of current fuel crisis
Speaking with newsmen at the weekend, spokesperson for the NNPC, Mr. Ohi Alegbe, said the Corporation did assured that within the next 48 hours distribution would have reached most parts of the country, thus bringing the fuel scarcity to a halt.
“We will wet the market with 688 million litres of petrol. Distribution of products is by trucking. You will agree that it is some distance from the depots and tank farms in the south to the depots and retail outlets in the hinterland. Expectedly, the queues should disappear before long.”
Alegbe had actually blamed the scarcity on panic buying by motorists and sharp practices by some retail outlets who are hoarding the commodity across the country, thereby frustrating efforts to stem the scarcity.
He said the NNPC had informed the Department of Petroleum Resources, DPR, of these sharp practices by some petrol stations’ owners for adequate sanctions against them.
“Panic buying has persisted in spite of our appeal to motorists. Secondly, some retail outlets are hoarding the product by dispensing from only one pump head. We have reported some of them to the DPR and we believe appropriate sanctions will be meted out to them appropriately.”
Echoing similar sentiments, the Group Managing Director, NNPC, Dr. Joseph Dawha, described the rush for fuel by motorists as panic buying, adding that the federal government had put all that was necessary in place to ensure seamless supply of petrol.
The GMD, alongside the heads of the Pipelines and Product Marketing Company, Petroleum Products Pricing Regulatory Agency and the Department of Petroleum Resources, said although there was enough stock to keep the country wet till April, the major challenge of non-payment of subsidy claims to the marketers and the differentials in foreign exchange rates had been addressed.
A breather
In what appeared a breather, the Independent Petroleum Marketers Association of Nigeria (IPMAN) had last Tuesday directed its members to commence importation of refined petroleum products as the Federal Government had pledged to pay outstanding subsidy.
The National President of IPMAN, Chinedu Okoronkwo, disclosed the directive said the directive followed assurances from government and to alleviate the sufferings of Nigerians from the ongoing national scarcity of petrol.
According to him, we have had series of meeting with government agencies that are saddled with the payment of subsidy claims and we have been assured of prompt payment.
“IPMAN members have been instructed to commence importation of petrol into the country to avert the lingering fuel scarcity.
“The Ministers of Petroleum and Finance have assured us of prompt payment of the marketer’s money; we urge Nigerians not to engage in panic buying of petrol as adequate petrol will be in circulation soon,” he said.
The IPMAN boss, however, warned its members to desist from hoarding petroleum products, adding that the association’s surveillance teams would monitor compliance nationwide.
“With the quantity of petrol pumped into the country and distributed to stations by the NNPC, the corporation has indicated serious commitment to ensure effective product supply.”
The current scarcity of petrol in most parts of the country is expected to continue till this week, The Nation learnt at the weekend.
Although there are assurances that the fuel scarcity may end this week, not a few have argued that what can contain the perennial fuel crisis in the country is concrete but not cosmetic measures.
Pray, hope someone is listening?
