Tag: Scarcity

  • Forex scarcity forces Marketers to cut imports

    F10uel marketers are cutting   imports because of their inability to get foreign exchange (forex), which now sells for N480 per dollar in the parallel market, The Nation has learnt.

    The situation is worsened by other factors, such as increase in the landing cost of fuel, poor profit and margins.

    It was gathered that the scarcity of forex had increased landing cost  from N133.28 per litre to N135, which made marketers to reduce importats and rely on the Nigerian National Petroleum Corporation (NNPC) for supply.

    It was further learnt that NIPCO and some oil marketing companies still import while many of the firms had either stopped or reduced their imports.

    An official of an oil marketing firm, who did not want to be named, said the issue was affecting members of the Major Marketers Association of Nigeria (MOMAN) and the Independent Petroleum Marketers Association of Nigeria (IPMAN).

    The source said NNPC was importing a larger percentage of fuel, because it had enough forex.

    The source said: “Problems, such as scarcity of forex, dwindling profit as evidenced by the poor margins being recorded by marketers, among others, have stalled efforts of marketers to bring in fuel. This informed the decision of the marketers to buy from NNPC.

    “Marketers buy fuel at N135 per litre as against N133.28. By the time the transport cost of N3 per litre and the bridging cost of N6.20 per litre are factored in, they (marketers) are left with very little profit, which in most cases is between N1 per litre and N1.50 per litre.’’

    MOMAN Executive Secretary Mr. Obafemi Olawore said the margins on litres of fuel were not enough. “The margins gained on imported petroleum products by marketers have never been adequate. By now marketers should be talking about impressive margins.”

    Olawore said he was yet to find out whether marketers were importing fuel or not. “I’m not abreast of the developments in the sector because I have been on leave,” he said.

    However, IPMAN factional leader Chinedu Okoronkwo refuted the claim.

    He said marketers were getting enough forex to import fuel, adding that operators were not complaining.

  • Dollar scarcity persists as demand overwhelms Travelex

    Dollar scarcity persists as demand overwhelms Travelex

    • CBN sells $313m

    Dollar scarcity has been linked to the inability of Travelex, the sole dollar distributor appointed by the Central Bank of Nigeria (CBN), to meet increasing demand from bureaux de change (BDCs).

    The three-week-old pilot scheme which allows Travelex to solely sell dollars to BDCs seems to be faltering, it was learnt yesterday.

    Travelex, a global forex dealer, was last month appointed the sole dollar distributor by the CBN but the firm does not have the spread to cover over 3,000 BDCs across the six geopolitical zones.

    A source said Travelex, which sold dollars to a little above 1,000 out of 3,000 BDCs nationwide, was only focusing on the Lagos market, while demands from other regions were not met. The figure was also far less than the 1,600 BDCs within the Lagos market.

    BDCs in Abuja, Kano, Port Harcourt, Benin, Maiduguri, Onitsha and other major cities are yet to get dollars since Travelex started the distribution role, the source said.

    Travelex Nigeria General Manager, Anthony Enwereji said the project was a pilot scheme with the policy direction still under study. He, however, said that since Travelex was appointed to sell dollars to BDCs, the naira exchange rate against the dollar has improved.

    The CBN last month stopped banks from accessing Diaspora remittances estimated at $21 billion annually, after it was discovered that the lenders were not playing by the rules.

    A source said despite the pressure from the BDCs for the CBN to approve more independent dollar distributors, nothing is being done about it. “We need more dollar distributors that would serve BDCs outside the Lagos market,” the source said.

    Travelex is the world’s largest foreign exchange bureau. It has in recent months been opening retail shops across major locations in Nigeria, such as airports and highbrow areas to enable it meet the rising forex demand, and fill the vacuum created by the apex bank’s stoppage of the Deposit Money Banks from selling dollars to BDCs.

  • Aviation fuel scarcity cripples airlines’ operations

    Aviation fuel scarcity cripples airlines’ operations

    Despite several efforts Airlines have been battling with the scarcity of aviation fuel scarcity. Correspondent KELVIN OSA-OKUNBOR reports that the ongoing collaboration among stakeholders including, airline operators, regulators and fuel marketers may bring succour.

    For stakeholders in the aviation sector, these are not the best of times. To domestic airline operators, passengers and regulators, the scarcity of aviation fuel, known in aviation parlance as Jet A-One, has become a nightmare.

    The problem has been lingered for the past few months with operators groaning under the burden of huge financial losses. The scarcity of Jet A-One is causing disruption in flight schedules. It is also leaving bitter tales for passengers to tell. They argonise  over occasional delays and in some cases, flight cancellations.

    Aggrieved passengers, who often demand to know the status of their flights and the inability for airlines to provide satisfactory response, has become a challenge to the industry regulator – the Nigerian Civil Aviation Authority (NCAA).

    The scarcity has pit many passengers against airlines’ personnel at the various airports nationwide, even as fuel marketers and the affected airlines trade words and accuse each other alleges sabotage. The situation has put the NCAA under tremendous pressure, as it battles to defuse the tension generated by passengers’ complaints.

    Investigations show that beyond the crisis of fuel shortage, the instability in the price of the product has also created problem in the supply chain. Several efforts made in the past to resolve the problem defied solutions.

    The two immediate past Aviation Ministers – Mrs. Stella Oduah and Chief Osita Chidoka, set up ministerial committees to resolve the crisis. But their efforts failed to yield results. The problem outlived their tenure and the scarcity has continued to put stakeholders in the industry under pressure.

    Many local airlines, including those operating international routes have been forced to scale down their operations. The airlines, who absolved themselves of blame for the readjustment in their route operations, said that marketers might be grappling with infrastructure challenge.

    However, some players, who spoke with The Nation, blamed the scarcity on fuel marketers.

    An aviation security expert, Group Captain John Ojikutu, accused the marketers of creating artificial scarcity to pave the way for product price hike.

    To Ojikutu, the airlines and marketers have questions to answer. He said: “Yes, the airlines are shouting. Are the marketers shouting? Are they concerned? What exactly is the problem? Is it a problem of scarcity or one of cost?

    “If it is a problem of cost, is it that of the marketers or that of airlines? Cost in what form? Is it that it is high or because the marketers are not getting foreign exchange?”

    Ojikutu urged the government should look into the problem. “It is a cabal. This is why the NCAA should be involved in providing aviation fuel”, he said.

    According to him, the NCAA must be involved in the importation, distribution and marketing of the product. “It should find out why the airlines are not getting fuel. That is why I said there is a problem somewhere, because only the airlines are shouting; the marketers are not”, the expert said.

    Also, the domestic carriers, under the auspices of the Airline Operators of Nigeria (AON), urged the Federal Government to wade into the problem.

    AON’s Chairman Captain Nogie Meggison, urged the government to address the acute shortage of aviation fuel.

    Meggison said the call became imperative because of the perennial product scarcity, which according to him, has led to 50 per cent of the delays in flights and cancellations.

    He said: “We have been forced to cry out over this perennial problem because it continues to put us in difficult situation to go the extra mile to fulfil our obligations to our customers in spite of the inconveniences that go with it. “However, we are at the mercy of oil marketers and many times our hands are tied such that we are left with no other option than to cancel flights.”

    The AON chief alleged that apart from the Jet A-1shortage, marketers have raised the price.

    “Until April this year, I bought Jet A-1 for N105 a litre. About a month ago, the price jumped to N145. Two weeks later, it rose to about N200 a litre. Today, the price has skyrocketed above N200 a litre. This has greatly increased our operational cost”, Meggison said.

    According to Ojukutu, “fuel cost accounts for about 40 per cent of operational costs of most airlines. So, the astronomical rise in its price by over 100 per cent has equally increased operational costs.

    “In the light of this, operators’ feasibility studies and financial projections were threatened, thereby putting the airlines in financial difficulty.

    The AON chair described as unfortunate that despite the development, airline operators have not increased ticket prices so as not to discourage customers, who have been overstretched by the harsh economy.

    He said the economic downturn has reduced the disposable income of many customers.

    Meggison said: “For most of them (customers), the alternative means of travel is by road; our major competitor. It should be put on record however, that road transport uses Premium Motor Spirit (PMS) also known as petrol, which is highly supported or assisted by the Federal Government with the exchange rate made available to marketers at N285.

    “On the other hand, airlines don’t have such foreign exchange support or availability from government with regards to helping to make Jet Fuel available to airlines or at an affordable price”, he said.

    The AON chair however informed that had met earlier in the year with the Minister of State for Aviation, Hadi Sirika, to seek a solution to the problem. The minister, he noted, assured the delegation of his assistance.

    As operators await the government’s intervention on the matter, they have called for the revitalisation of the Aviation Turbine Fuel (ATF) at Warri Refinery and the pipeline -hydrant system supplying aviation fuel to the Murtala Muhammed International Airport (MMIA), Lagos.

    The operators said that beyond reactivating the Warri Refinery, the Atlas Cove and Mosimi pipelines -hydrant system, hitherto supplying aviation fuel to the airport should also be fixed.

    It was learnt that before the pipelines were shut in 1996, aviation fuel hydrant at the MMIA was supplying fuel to aircraft through the pipeline from Atlas Cove and Mosimi.

    Meggison urged the Nigeria National Petroleum Corporation (NNPC) to upgrade the pipelines, which must have become rusty, having been abandoned for 18 years. “We need NNPC to revive this pipeline so that airlines can get cheaper and cleaner aviation fuel,” he said.

    He pointed out that one of the causes of high cost of aviation fuel is the cumbersome distribution chains it passes through before getting to airline operators.

    Pumping fuel through the pipeline and hydrant, the AON chief said, is safer and more cost-effective compared to using tankers and fuel bowsers, adding that airports no longer use tankers to distribute fuel.

     

    Fed Govt steps in

    The aviation stakeholders may soon heave a sigh of relief with the intervention of the Federal Government. The Nation learnt that the stakeholders in the aviation fuel supply chain are being engaged not only to ensure availability of the product but to end the perennial scarcity.

    The NCAA said the government and fuel marketers are in talks to clear the hurdles in the supply of the product for stress-free operations of the airlines.

    The regulator which acknowledged the prevailing scarcity of Jet A-1 and its effect on airline operations, said it has also taken note of the efforts being made by the airlines to ensure hitch-free air transportation.

    Last month, Arik Air said it was grappling with flight schedule disruptions caused by severe scarcity of aviation fuel across the country.

    Its spokesman, Adebanji Ola, said since the beginning of this year, Nigeria has been grappling with inadequate supply of aviation fuel leading to shortages of the product and consequently the disruption of flight operations.

    Ola said: “The airline operates an average of 120 daily flights, requiring about 500,000 litres of fuel daily. Due to the large number of domestic and international flights, it is the most affected by the inability of oil marketers to meet its daily fuel requirements on a timely and consistent basis. This has forced the airline to postpone flights while waiting for the fuel marketers to source and deliver the product.

    “On many occasions, despite all efforts in engaging the marketers, fuel could not be sourced and flights may eventually be cancelled, causing not only revenue loss for the airline but also inconveniencing passengers.”

    He, however, identified marketers’ supply and infrastructural challenges as some of the key factors responsible for the epileptic supply of aviation fuel.

    Ola said: “At the root of the fuel supply crisis is low stock due to the inability of marketers to source for foreign exchange to import more Jet A-1 fuel into the country.

    “There is also a distribution challenge, as the discharging of vessels bringing Jet A-1 and other petroleum products are done in the same jetty. Loading various trucks for distribution to cities like Kano or Abuja takes considerable effort and time.

    “The situation in the North is even more difficult since the product takes a longer time to be delivered due to the trucking distance. Oil marketers have also resorted to trucking of aviation fuel to the airports because hydrants are not consistently available at the airports.”

    According to the Arik Air’s spokesman, in the course of the ongoing dialogue between the government and oil marketers, the operators appealed to customers to bear with them on the flight delays and cancelations being experienced due to the prevailing scarcity of aviation fuel.

    Until the outcome of the ongoing talks between the government and the stakeholders, airlines have the problem to contend with.

  • The politics of aviation fuel scarcity

    The politics of aviation fuel scarcity

    For weeks, things have been tough for airlines, because of the scarcity of aviation fuel otherwise known as Jet A-one.  Despite all efforts, the problem remains unsolved. KELVIN OSA-OKUNBOR reports that the on-going collaboration among airlines, regulators and fuel marketers may end the impasse.

    These are not the best of times for stakeholders in the aviation sector. From domestic airline operators to passengers, even to regulators, the scarcity of aviation fuel, otherwise known as Jet A-One, has become a nightmare.

    The problem, which has been lingering in the last few months, has been hurting operators who bear the burden of huge financial losses caused by disruption in flight operations. It has also left bitter taste in the mouths of passengers, who agonise daily over occasional delays and flight cancellations.

    By extension, the spate of near-air rage by aggrieved passengers demanding to know the status of their flights, for which airlines are unable to provide response, has continued to pose a serious challenge to the industry regulator Nigeria Civil Aviation Authority (NCAA).

    The scarcity of aviation fuel, which hit the industry, has pit many passengers against airline personnel at airports nationwide, even as allegations of sabotage are raging among fuel marketers and the affected airlines. This has put NCAA under tremendous pressure, as it battles to difuse the tension generated by passengers’ legion of complaints.

    Investigations,  however, revealed that aviation fuel is not only unavailable; the fluctuation in the price of the product in the last few months was also an issue that underscored the hiccups in its supply chain. This partly explains why the scarcity appears to have defied previous attempts to resolve it.

    Two former ministers of aviation, Princess Stella Oduah and Chief Osita Chidoka, are said to have set up Ministerial Committees to resolve the crisis. But the move may have failed to yield results, as the problem continued to put the stakeholders in the industry under pressure.

    Already, many airlines, including Arik Air, have scaled down their operations on some routes because of the scarcity. While absolving themselves of blame for the problem, the affected airlines also said that marketers might be grappling with infrastructure challenge.

    However, some players, who spoke with The Nation, put the blame for the scarcity at fuel marketers’ doorstep. For instance, an aviation security expert, Group Captain John Ojikutu, accused fuel marketers of creating the scarcity to increase the price of the product.

    As far as Ojikutu is concerned, airlines and marketers have questions to answer. He said: “Yes, the airlines are shouting. Are the marketers shouting? Are they concerned? What exactly is the problem? Is it a problem of scarcity or one of cost?

    “If it is a problem of cost, is it that of the marketers or that of airlines? Cost in what form? Is it that it is high or because the marketers are not getting foreign exchange?”

    He said there was something the government should look into. “It is a cabal. This is why the NCAA should be involved in providing aviation fuel,” he said.

    According to Ojikutu, the NCAA must be involved in the importation, distribution and marketing of the product. ‘’It should find out why the airlines are not getting fuel. That is why I said there is a problem somewhere, because only the airlines are shouting; the marketers are not,” the expert said.

    Worried by the effects of the scarcity on their operations, Airline Operators of Nigeria (AON), the umbrella body of domestic carriers, called on the Federal Government to step in. Its Chairman, Captain Nogie Meggison, urged the government to, urgently, address the acute shortage of aviation fuel.

    Meggison said the call became imperative because of the consistent unavailability of the product in the past few weeks. He lamented, for instance, that the problem has led to 50 per cent delays or cancellation of flights.

    He said: “We have been forced to cry out over this perennial problem because it continues to put us in difficult situation to go the extra mile to fulfil our obligations to our customers in spite of the inconveniences that go with it. However, we are at the mercy of oil marketers and many times our hands are tied such that we are left with no other option than to cancel flights.”

    The AON chief alleged that apart from the shortage of Jet A-1, marketers have been increasing the price to unbearable levels.  “Till April this year, I bought Jet A1 Fuel for N105 a litre. About a month ago, the price jumped to N145. Two weeks later, it rose to about N200 a litre. Today, the price has skyrocketed above N200 a litre. This has greatly increased our operational cost,” he said.

    Ojukuta said considering that cost of fuel accounts for about 40 per cent of operational costs of most airlines, the astronomical rise in price of the fuel by over 100 per cent had equally increased operational costs. In the light of this, he said, operators’ feasibility studies and financial projections were threatened, thereby putting the airlines in financial difficulty.

    The AON chair lamented that in spite of  these, operators could not increase ticket prices in order not to discourage customers that have been seriously stretched due to the economic hard time facing them. He said the economic downturn has reduced the disposable income of many airline customers.

    He said: “For most of them (customers) now the alternative means of travel is by road; our major competitor. It should be put on record however, that road transport uses Premium Motor Spirit (PMS) also known as petrol, which is highly supported or assisted by the Federal Government with exchange rate of N285 and available to marketers.

    “On the other hand, airlines don’t have such foreign exchange support or availability from government with regards to helping to make Jet Fuel available to airlines or at an affordable price.”

    He, however, said operators earlier this year met the Minister of State, Aviation, Hadi Sirika, to seek a solution to the problem. The minister, according to him, assured the delegation of his assistance.

    While operators await the government’s intervention on the matter, they have also called for the  reviving of  the Aviation Turbine Fuel (ATF) at Warri Refinery and the pipeline -hydrant system of supplying aviation fuel to the Murtala Muhammed Airport (MMA), Lagos.

    The operators said apart from reviving the Warri Refinery, the Atlas Cove and Mosimi pipelines -hydrant system earlier used for supplying aviation fuel to the airport should also be fixed.

    It was learnt that before the pipelines were shut in 1996, aviation fuel hydrant at the Murtala Muhammed Airport was used to supply fuel to aircraft through the pipeline from Atlas Cove and Mosimi.

    Meggison said the Nigeria National Petroleum Corporation (NNPC) should look into the possibility of reviving the pipelines, which must have become rusty, having been abandoned for 18 years. “We need NNPC to revive this pipeline so that airlines can get cheaper and cleaner aviation fuel,” he said.

    He pointed out that one of the causes of high cost of aviation fuel is the cumbersome chain of distribution and supply it has to pass through before getting to airline operators.

    Pumping fuel using pipeline and hydrant, the AON boss said, is safer and more cost effective compared to using tankers and fuel bowsers. He added that airports do not use tankers for fuel distribution these days.

     

    Fed Govt’s intervenes

    Bad as the situation is, stakeholders, especially operators may soon heave a sigh of relief. This is because the Federal Government said it is engaging stakeholders in the aviation fuel supply chain to ensure availability of the product.

    Speaking through the NCAA, the government said it was engaging fuel marketers to clear hurdles in the supply of the product, which had ripple effects on airline operations for weeks.

    The regulatory authority said it was aware of the prevailing scarcity of Jet A1, which has inevitably led to flight cancellations and delays by the airlines, adding that it has also taken cognisance of efforts being made by the airlines to ensure that passengers were ferried without any hitches.

    Last month, Arik Air said it was grappling with flight schedule disruptions caused by severe scarcity of aviation fuel across the country.

    Its spokesman, Adebanji Ola, said since the beginning of this year, Nigeria has been grappling with inadequate supply of aviation fuel leading in most cases to shortages of the product and consequently the disruption of flight operations.

    Ola said: “The airline operates an average of 120 daily flights, requiring about 500, 000 litres of fuel daily. Due to the large number of domestic and international flights, it is the most impacted by the inability of oil marketers to meet its daily fuel requirements on a timely and consistent basis. This has forced the airline to postpone flights while waiting for the fuel marketers to source and deliver the product.

    “On many occasions, despite all efforts in engaging the marketers, fuel could not be sourced, and flights may eventually be cancelled, causing not only revenue loss for the airline but also inconveniencing passengers.”

    He, however, identified marketers’ supply and infrastructural challenges as some of the key factors responsible for the epileptic supply of aviation fuel. He explained: “At the root of the fuel supply crisis is low stock due to the inability of marketers to source for foreign exchange to import more Jet A1 fuel into the country.

    “There is also distribution challenge, as the discharging of vessels bringing Jet A1 and other petroleum products are done in the same jetty. Loading various trucks for distribution to cities like Kano or Abuja takes considerable effort and time.

    The situation in the north is even more difficult since the product takes longer to be delivered due to the trucking distance. Oil marketers have also resorted to trucking of aviation fuel to the airports because hydrants are not consistently available at the airports.”

    Ola said while the Federal Government and oil marketers were working hard to address the supply and distribution challenges, operators had appealed to customers to bear with them, as they might experience flight delays and cancelations because of the prevailing scarcity of aviation fuel across the country.

    It remains to be seen how the deal with oil marketers will resolve the problem. But until that happens, it remains complaints galore for various stakeholders in the aviation sector.

  • ‘Blame Fed Govt for cooking gas scarcity’

    ‘Blame Fed Govt for cooking gas scarcity’

    Being an oil-producing country, Liquefied Petroleum Gas (LPG), known as cooking gas, should always be available in Nigeria. But that is not the case. Many, whether in the urban or rural areas, cook with kerosene and charcoal because of the product’s scarcity. The Chief Executive Officer, Nigeria Association of Liquefied Petroleum Gas Marketers (NALPGAM), Mr. Bassey Essiet, blames government’s policy for the problem, AKINOLA AJIBADE met him.

    When did Nigeria join the league of countries using Liquefied Petroleum Gas (LPG)?

    Nigerians have been using cooking gas for some time. But we began to give LPG the desired attention in 2007, during the administration of former President Olusegun Obasanjo. In 2007, Obasanjo directed the Nigerian Liquefied and Natural Gas (NLNG) to be producing LPG for domestic consumption. The government, in its calculation, believes that LPG export is detrimental to Nigerians, who need the product for domestic and industrial use. Of note is that the period coincided with the time the four state-owned refineries: namely Port Harcourt 1 & 2; Kaduna and Warri refineries were not producing optimally. As a result, the refineries were unable to produce enough kerosene for local use. The development did not only affect kerosene supply negatively, but resulted in more demand for kerosene.  Based on this, our association decided to intensify campaigns on the use of LPG.

    What is the worth of the LPG market?

    It is difficult to say the worth of the LPG market in Nigeria. Putting a figure to its worth means one simply is guessing because it is just like asking for the worth of the crude oil market. Nigeria is the largest producer of oil in Africa. If we are talking about per capita consumption of LPG in Nigeria, it is one kilogramme. This is far lower than the per capita consumption in Morocco. The government is planning to increase per capita consumption from one to three kilogrammes, which translates to 600,000 metric tonnes per annum. A kilogramme of LPG is 200,000 metric tonnes per annum. As at 2014, the country was supplying 250,000 metric tonnes of LPG to the market. Nigeria started with 60,000 metric tonnes per annum and increased it to 150,000 metric tonnes years later. Subsequently, it was increased to 250,000 metric tonnes per annum and the country is targeting 350,000 metric tonnes. But in line with the LPG roadmap developed by the Federal Government with the World Bank, the country is supposed to be at a per capita consumption of 3.75 kilogramme, which is 600,000 metric tonnes per annum. However, we are not there yet. Ideally for the size of Nigeria, which has over 170 million people, the country should be supplying one million metric tonnes of LPG per year to the market. The question is: How are we going to achieve that? It is by creating more awareness.

    Scarcity of LPG is a recurring decimal. What is the cause?

    Several factors are responsible for the scarcity of LPG in Nigeria. First, scarcity started with when multinational oil companies were dominating the country’s LPG market. At a point, the foreign owned firms could not produce enough LPG for the market. The second problem has to do with logistics. There are hitches in the transportation of cooking gas across the country, coupled with challenges facing the terminals designated for the delivery of the product, by the Federal Government. Three terminals were approved for such purpose by the government. Out of this, two terminals were giving priority to discharge white products, such as petrol, kerosene and diesel ahead of LPG. This has resulted in the delay in discharging LPG to consumers. Because of this problem, LPG vessels have to wait for hours or weeks before they discharge their content.

    Who is to blame for the problems in the LPG sub-sector?

    This is not the time to apportion blames. The way the system operates here is quite different from what it is obtainable in other climes. There are activities that are contrary to the law of the land. There are manipulations and sharp practices. What we can only do is to bring to attention the people involved in these activities. We have been doing that. Few weeks ago, our association had a meeting with the hierarchy of Product Pipelines Marketing Company (PPMC) and the problems including scarcity of LPG in sub-sector was discussed, and PPMC promised to look into the problems. Based on the synergy between NALPGAM and PPMC, we invited the Managing Director of PPMC, Mr. Ahmed Farouk, to the commissioning of our NALPGAM‘s secretariat in Lagos, where he said he would be happy to see the country meeting the needs of consumers of cooking gas soon.

    When will the problem be resolved?

    We hope to end the problem of scarcity of cooking gas soon. Stakeholders are meeting to proffer solution to the problems which includes but not limited to terminal congestion, storage, vessels and others. The PPMC has been working on this. The NALPGAM, PPMC and other relevant stakeholders have been meeting on the issue. Also, the Nigerian Liquefied and Natural Gas has been playing a pivotal role in this regard.

    What is the future of LPG sub-sector like, in view of plethora of problems facing it?

    The future is bright; the problems are going to be resolved soon, and the LPG sub-sector will start on a new note. Presently, innovations that would launch the sub-sector into prominence have started. Operators in oil and gas and allied sectors are working on how to use Compressed Natural Gas (CNG) for automobiles. It is has begun in Nigeria, and with time, many people would be using gas to power their vehicles, and not petrol. This is not new in Europe and other developed economies. But Nigeria is gradually catching on with it. Recently, I was invited to witness a demonstration in Surulere, Lagos, where gas was used to power a generator. That is why I said the future of LPG is great in the country.

    What is the main reason for establishing this body?

    The reasons include the need to create awareness for the usage of LPG in the country; reduce health hazards accompanying the use of stoves, firewood and charcoal; raise the status symbol of people, and further check the monopoly of foreign-owned oil companies that dominate the sub-sector. Prior to 1986, when the body was formed, there was a knowledge gap in the LPG sub-sector. Many do not know what the usage entails, others saw cooking gas as a preserve of the rich or elites. During that period, people were equating the usage of LPG to that of telephone, which was regarded as a status symbol then. Added to this is the fact that only multinational oil companies such as Mobil, Total, among others, were selling LPG in their outlets across the country. People took their gas cylinders to the outlets to refill them, albeit, spending hours on the queue. Many even travelled to Cotonou, Benin Republic, to buy cooking gas. The association was formed to correct these anomalies and further serve as an umbrella for cooking gas marketers.

    Are foreigners behind the monopoly in the sub-sector then?

    Yes, they are. Foreigners, to some extent, created monopoly in the sub-sector. Once there are few years in a market, they tend to dominate it.They create a block, through which, they control activities in that market. However, with the awareness on LPG increasing by the day, the association was able to check the excesses of the foreign oil firms in the sub-sector. Not only this, the body has brought together entrepreneurs in order to have one voice. The efforts have paid off, as the body boasts of 400 members and 400 LPG plants. This means that indigenous marketers are having a considerable influence on the market.

    Are oil marketing firms included in your NALPGAM membership?

    The membership of the association is not by force. We do not compel anybody to be our member. The marketers, either major or independent, are not compelled to become members.

    The association appears not to have control over the marketers in the sub-sector…

    (Cuts in): The fact that NALPGAM is the umbrella body for LPG marketers in the country does not confer on it the right to control or regulate the sub-sector. The power to regulate activities in LPG industry lies with the Department of Petroleum Resources (DPR). DPR is vested with the power to license or approve LPG marketers, once they have met the requirements, which include, but not limited to the ownership of a plant. The entry point to play in the sub- sector is ownership of a plant. Once that has been done, the operator can join the association. The entry is free. This could be likened to what happened in the banking industry years ago, when banks had option to join a union in the industry.

    Do you complain to DPR, whenever you discover untoward practices in the sub-sector?

    We do not report erring marketers to DPR. Even though, the body holds meetings with DPR periodically. The association does not report erring operators to DPR formally. The DPR conducts its monitoring to put the sub-sector in proper perspective. Through this, it discovered bad operators and deal with them appropriately.

    How does the body handle issues on sharp practices?

    The association has a committee, which regulates the conduct of its members. Periodically, the committee’ members go round to ensure compliance. There is a membership sticker, which members are required to put on their plants. Usually, people in the committee check the sticker when they visit plants that are owned by members. Thereafter, they send their feedback to the association. Once, we discover sharp practices, we reach out to the people involved. Aside this DPR monitors marketers with a view of fish out corrupt ones.

    What are the achievements of the body so far?

    Through awareness programmes, the association has helped in increasing the use of LPG, improving the health of Nigerians, by letting them know that it is dangerous to be using kerosene or firewood for cooking. Also, jobs have been created. An LPG plant, on average, employs 10 people. This means that the 400 plants that are identified by the body have created 4,000 jobs. Reduction in erosion and exposure to ozone layer, are some of the successes recorded by the body. People have been educated cutting down of trees because erosion and expose people unduly to ozone layer and have since reduced such activities.

  • Aviation fuel scarcity disrupts flights

    Aviation fuel scarcity disrupts flights

    At the Muritala Muhammed Airport in Ikeja, Lagos, Dana Air and Arik Air were worse hit.

    The airlines had several hours of flight delay, leading to the cancellation of some.

    Scores of passengers at the domestic wing of the airport waited for hours to know the status of their flights.

    Airlines have been merging flights since the problem started five days ago.

    In a statement yesterday, Arik Air spokesman, Mr Adebanji Ola said the airline is grappling with flight schedule disruptions because of what he called the severe scarcity of aviation fuel.

    He said the scarcity started at the beginning of the year.

    Nigeria had been grappling with inadequate supply of aviation fuel leading in most cases to severe shortage of the product and the disruption of flights. For the past week, the airline, he said faced another aviation fuel scarcity which got worse over this weekend leading to many flight delays and cancellations.

    The airline operates an average of 120 flights daily requiring about 500,000 litres of fuel daily.

    Arik said it was the worst hit because of its large number of domestic and international flights as oil marketers are unable to meet its daily fuel requirements on a timely and consistent basis.

    This, Ola said, has forced the airline to postpone flights while waiting for the marketers to source and deliver the product.

    He said: “At the root of the fuel supply crisis is low stock due to the inability of marketers to source for the foreign exchange to import more Jet A1 fuel into the country. There is also a distribution challenge as the discharging of vessels bringing Jet A1 and other petroleum products are done in the same Jetty and loading various trucks for distribution to cities like Kano or Abuja takes considerable effort and time. The situation in the north is even more difficult since the product takes longer to be delivered due to the trucking distance. Oil marketers have also resorted to trucking of aviation fuel to the airports because hydrants are not consistently available at the airports.”

    The airline said it was working on a longer term plan which will be finalised in the coming months to mitigate the situation and be in a better position to address such supply shortages and delays.

    He went on: “While the Federal Government and oil marketers are working hard to address the supply and distribution challenges, we appeal to our guests to bear with us as they may experience flights, delays and cancellation because of the prevailing scarcity of aviation fuel across the country. Marketers have assured that the situation would improve this week as they are expecting delivery of additional stock. Where flights are likely to be delayed or cancelled, Arik Air will notify passengers through SMS and do all possible to accommodate passengers on the first available alternate flight.”

     

  • Agony,  frustration trail  soaring tomato  prices, scarcity

    Agony, frustration trail soaring tomato prices, scarcity

    Tomato has suddenly disappeared from the market. No thanks to the seasonal scarcity and a sudden outbreak of Tuta absoluta, a pest that has devastated in major producing states in the north devastated. Consumers are agonising that prices have gone up by about 200 per cent. DANIEL ESSIET reports that stakeholders are working round the clock to address the crisis.

    The Managing Director, Yomart World of Event, an outdoor catering/events management outfit, Mr. Martins Oriyomi, is faced with a tough choice. The price of fresh tomatoes, which he prefers for preparing dishes for his clients, has, in recent times, gone up.

    The development has left him with two options – to hike prices of his dishes and risk losing customers or switch to other substitutes such as canned tomato paste and dry pepper and lose the exquisite taste that has been his selling point.

    Oriyomi has been in this dilemma since February when tomato, a vegetable crop became scarce, forcing about 200 per cent increase in the price of the popular edible.

    The supply shortfall has been blamed on a number of factors including prolonged warm weather in major tomato-producing areas in the North; insecurity triggered by Boko Haram insurgency and pest attacks.

    For instance, a season of poor rainfall in 2015 and 2016 has not been good for tomato farmers. It has forced farmers to reduce their farmlands. The farmers, who used to grow the vegetable in about five acres, have been using about an acre to water shortage.

    Perhaps, worsening matters, most of the farmlands in Kano, Jigawa, Plateau, Katsina and Kaduna state are said to have been wiped out by a virulent pest, known as ‘Tuta Absoluta,’ which killed all the tomato species there.

    Tomato farms at the Kadawa Irrigation Valley, the major producing area and demonstration farms designed to feed the Dangote’s Dansa Tomato Company in Kano State, has been destroyed by the virus.

    Apart from the fact that the unrest in the tomato-growing states in the Northeast has adversely affected farmers’ ability to plant and harvest, the fuel price hike also contributed to the scarcity. And the result is soaring price of tomato with four pieces going for as high as N200.

    Consequently, Oriyomi has since ordered his chefs to use dry tomatoes and other substitutes since the outfit cannot risk the introduction of an increase in the prices of its menu.

    For now, he relies on his culinary experience to mix dry tomato with other condiments to give his dishes a flavor appealing to patrons.

    Oriyomi is not alone in his agony, over the sudden scarcity of tomato and the subsequent increase in prices. The situation has also left sour taste in the mouth of Mr. Abia Onyekaozuru, a food stuff seller.

    Frustrated by the development, Onyekaozuru switched to other substitutes such as tomato paste, canned and sachet of tomato, which now enjoy increased patronage than fresh tomato. But, it has also been a tough choice.

    He told The Nation, that the increased patronage of such substitutes has affected their prices, pointing out that the e price of a sachet of tomato paste has risen from N50 to N80.

    Also lamenting, a tomato dealer in Daleko Market, Lagos, told The Nation that from the usual price of between N5, 000 and N6, 000, a basket of tomatoes has gone up between N25, 000 and N30, 000.

    The dealer, who pleaded for anonymity, said the increase in prices has taken a huge toll on many businesses in the food industry. Not a few tomato sellers have diversified temporarily because the end-users of their wares have found alternatives.

    Housewives and restaurateurs are no less hit by the sudden scarcity and price increase. The unique taste of fresh tomatoes that has been a regular condiment on most tables has since disappeared as most families can hardly afford the high cost of the juicy and red edible.

    “The price of tomatoes is very high. This is despite the fact that tomato is grown in Nigeria. This is unfortunate and regrettable,” Mrs. Blessing Adokwu, a housewife, lamented.

    Mrs. Adokwu added that as a result, prices of other items like beans, carrots, cucumber and other greens have risen marginally.

    She urged the government to wade into the situation and ensure that tomato vendors do not cash in on the situation to exploit and extort consumers.

    The vendor said the government’s intervention has become necessary because there appears to be no respite in sight in a short while.

    Her fears have been fuelled by speculations in some quarters that the sudden scarcity of tomatoes was caused by the establishment of a tomato processing plants

    For instance, citing supply shortage as a reason for the rising cost, Mrs. Grace Umoh, a businesswoman, said: “Due to the establishment of a processing factory in Kano, we are told there has been less output and that has resulted in the steep rise in cost of the product.”

    There is the fear that promoters of tomato processing plants may have mopped up available stock in the farms to feed their factory and encourage the patronage of processed tomato puree.

    Mrs. Umoh, who appears to harbour such fear, insists that the situation will not ameliorate until the regularisation of the distortion in supply.

    She said although farmers in the Southwest are making efforts to grow tomatoes with the advent of rains, tomatoes from the region do not enjoy acceptability. They are believed to be watery and go sour quickly than those grown in the North.

    Enter ‘Tomato Ebola’

    To the Minister of Agriculture & Rural Development, Chief Audu Ogbeh, the tomato scarcity and the attendant price hike arose from attacks from a pest (tuta absoluta). He said the pest, which was discovered in South America in 1912, where it ravaged many farms before it spread to Europe and then to Asia, has now entered East and West

    Africa.

    According to him, the pest found its way into Nigeria from Niger Republic, manifesting a powerful infestation that could make it impossible for local cultivation, if not dealt with.

    Already, the pest, which was responsible for the massive destruction of tomato in farmlands, has invaded six tomato-producing states.

    The states confirmed by the Federal Government confirmed to have been hit by Tuta absoluta, commonly referred to as ‘Tomato Ebola’ are: Jigawa, Kano, Katsina, Kaduna, Plateau and Lagos.

    The fact that tomatoes are the most used vegetable in the country makes the rampaging pest a disturbing development.

    Chief Ogbeh, who spoke at a press briefing in Abuja, however, described as erroneous claims that the processing plants have mopped-up tomatoes in country.

    He said the highly reproductive nature of the pest and lack of management skills for its containment resulted to its spread.

    Ogbeh, however, said the Federal Government had started consulting with the affected states and experts to seek measures to tackle the pest.

    He said: “The pest can also attack even pepper and Irish potato. So, we are confronting something quite serious. But the good thing is that we are tackling it right now as experts will commence work immediately.

    “We are bringing the commissioners and state governors to jointly attack this pest, which if not dealt with, will create serious problems for food security in our country.”

    The minister added that Nigeria spends N80 billion ($400 million) annually on the importation of tomato paste, most of which are highly substandard. He said experts had already offered other varieties of tomato that grow well in the western part of the country as alternatives to the existing genre.

    Ogbeh said: “We have called in experts and we have studied the profile of what we have to do with the pest. Unfortunately, ordinary pesticides cannot deal with this ‘tuta absoluta’ because it has a way of multiplying so fast. It produces almost 250 offspring per cycle.

    “We are in contact with a group which had dealt with this in other countries and they are offering us solutions. In the next few days we shall get to work on this and begin treatment. It is going to be quite expensive as it will cost about five naira per tomato plant.”

    Prices soar, consumers’ groan

    The disease is digging a hole in the pockets of consumers. Ogbeh admitted this much when he said the price of tomatoes had gone so high that a basket now sold for between N35, 000 and N42, 000 in Lagos.

    Experts have called for more synergy among stakeholders in the tomato value chain. These include government agencies, research institutes and universities; entrepreneurs, Small and Medium Enterprises (SMEs) and farmers.

    Such calls may have been fuelled by fears that the rising prices may linger throughout the year if there are no initiatives in the areas of production, monitoring and implementation of workable policies, with the involvement of corporate farmers in cultivation and processing.

    Tomato processing firms also hit

    The Nation learnt that tomato farms at the Kadawa

    Irrigation Valley, which is the major producing area and demonstration farms designed to feed the Dangote’s Dansa Tomato Company in Kano State, has been ravaged by the pest.

    Consequently, the processing factory has suspended production, attributing it to disease attack on their major raw material.

    Its Managing Director, Alhaji Abdulkadir Kaita, said the company, which began production in February, suspended production for dearth of raw materials.

    Most of the plants in Kano, Jigawa, Plateau, Katsina and Kaduna state where the company hopes to source its raw materials have been affected by the pest. This made the price of the perishable commodity to go up.

    Alhaji Kaita, however, said production would commence during the next irrigation season, emphasising that the company has capacity to process 120 tonnes of fresh tomatoes daily.

    Insurgents not helping matter

    With the attention focused on the government and experts to halt the rampaging virus, activities of the dreaded Boko Haram sect, according to the Minister ofInformation & Culture, Lai Mohammed, are also aiding scarcity.

    Last week, the minister put the blame on the doorstep of the insurgents, who he said, forced farmers to quit the Northeast due to the level of insecurity in the region.

    His word: “People talk about the price of tomato, but they forget one thing; they forget that the price of tomato today is a direct result of the fact that we have lost two years harvest to Boko Haram insurgency.

    “Most of the people you see riding Okada (motorcycles) in Lagos are people who would have been in the farm to produce consumable items. Do you farm where there is war?”

    Besides losing two harvest seasons in the Northeast, the nation had very poor rainfall last year and early this year. “Go and ask economists and agriculturists, they will tell you,” he said.

    Kaduna State Governor Mallam Nasir El-Rufai, said 80 per cent of the tomato produced in his state had been ravaged by pests and diseases. He has declared a state of emergency in tomato production in the state, saying that all hands must be on deck to combat the various pests and diseases ravaging tomato.

    According to El-Rufai, tomato has been destroyed in three local government areas of the state, resulting to monthly revenue loss of about N1b and affecting more than 200 farmers.

    “In the past one month, 12 tomato-producing local government areas have lost 80 per cent of their harvest. In three council, about 200 farmers have lost N1 billion worth of tomato. This is as a result of the invasion of Tuta Absoluta. So, you can imagine the magnitude of the loss,” the governor said.

    El-Rufai, who spoke through his Commissioner for Agriculture, Dr. Manzo Maigari, however said some officials of the state ministry of agriculture had been sent to Kenya to learn how to combat the menace.

    He added that the problem was so severe that even Dangote Group, which has established a tomato processing plant in Kano, had to shut down production.

    The governor said: “The problem with the disease, which is caused by a moth, is that no amount of spraying will kill its larva. You spray it, after about three hours, it comes back to life. So, we have sent some of our officials to travel to Kenya and meet our partners. Kenya has a good advantage over us on this issue.

    “We understand that they use a plant extract to take care of this problem. But we do not have that knowledge yet. We expect them to return very soon with short and medium-term solutions.”

    What experts say

    Experts in the agricultural sector say that there are diverse causes for the current tomato scarcity. A crop protection specialist, Prof. Daniel Gwary, identified inclement weather as one of the factors. He said tomato farmers need the rains, which has been everything but sufficient.

    The President, Tomato Processors Association of Nigeria, Prince Samuel Joseph Samuel, explained that there are one or more diseases associated with any crop, with the disease occurring every year.

    According to him, the management of the disease or pest is what matters, adding that the tragedy is that they (the pest or disease) strike when they are least expected to do so.

    Samuel said: “Basically, what we have had over the years has revealed the need for industry collaboration; stakeholders need to come together and work together so that we can pull resources to fight these diseases.

    “Some of these diseases require prompt action. If we don’t have local capacities for vaccines and chemicals to tackle these diseases instantly, we are going to be facing the challenge every time.”

    Samuel, who is also Chairman and Chief Executive, Vegefresh Group, told The Nation that Tuta Absoluta is not a disease that is common only to tomatoes.

    He said: “It is also not the first time we are having it in Nigeria. What we need to understand differently is that tomato is a seasonal produce and rain fed tomato is 70 to 80 per cent grown in the Northern part of Nigeria.

    “We are not saying that other parts of the country such as Ogun State cannot grow tomatoes. Currently, where we grow tomato heavily are those areas that are well developed to support massive cultivation. They have been growing tomatoes over the years,” he explained.

    Stating that tomato scarcity has become an every year affair, the expert added that apart from the ravaging disease, the inflation across the value chain has also affected supply.

    He said: “You have the fuel pump price increase; the devaluation of the naira that has increased the cost of transportation and other services that are rendered. Now, we will naturally have apart from the disease inflationary challenges.

    “All these factors put together is affecting the current price of tomatoes. But if I rate it, I think inflation has more impact on the price of tomatoes than other factors.”

     

  • Niger residents groan as water scarcity worsens

    Life’s most precious liquid has been hard to come by in Niger State for weeks and there is little sign that the worst is over. Residents have been groaning as a result.

    Water boreholes have hardly made any difference because there has been no electricity to power them. There has been little or no supply of water from the state water board; when the board does pump water, only about 30 per cent of residents manage to get it.

    Even the Mai Ruwa or water vendors, who usually push their trucks about, are hard to come by; when they are seen, their fees are exorbitant.

    Members of the state House of Assembly have expressed concern over the development. The legislators urged the state government to do something and provide the people with water. They also asked for the upgrade of the water board.

    The call was made following a motion moved by the member representing Bosso Constituency, Hon Madaki Malik Bosso urging the state government to work in improving water supply in the state.

    Bosso noted that the supply of adequate water in the state has completely deteriorated adding that a lot of areas have been completely cut off from water supply.

    He added that the state water board which is supposed to supply the state with water has been commercialised as private water tankers who buy from the board and sell to residences at exorbitant prices adding that the water board needs a complete overhaul of equipments to meet up with the increasing expansion and populace of the state.

    He said, “It is pathetic to see people going up and down searching for water, even the truck pushers are not easily accessible. People hardly get water to drink, cook and bathe.

    “Government must make sure that the needs of the citizens are catered for. Water is first before anything. That is what prompted me to bring out the motion. Government have to find a lasting solution to water in the state.”

    After deliberation, the Legislators urged the government to direct the water board to engage their water tankers to supply water on regular basis at subsidised rate to people in the state while stressing on the need for the government to extend the ongoing water project in the state to meet up with adequate water supply.

     

  • Why scarcity persists at N145 per litre, by DPR

    Why scarcity persists at N145 per litre, by DPR

    The Department of Petroleum Resources (DPR) yesterday explained that the scarcity of the Premium Motor Spirit (PMS) has persisted in the Federal Capital Territory (FCT) because some of the stations did not have enough stock prior to the announcement of the increase in pump price to N145 per litre.

    According to the Assistant Director in-charge of Operation, Abuja Zone Mr. Ahmed Alaku, who spoke with The Nation on phone, bringing the products from the depots to Suleja for onward distribution to filling stations, would take some days.

    “I am in a station as I talk to you and there are queues everywhere. It is because as at yesterday (Wednesday), the product that marketers loaded was not enough. Let’s give them some few days and see what happens because you know that some stations did not get products.

    “And you know if they load products in Lagos, Calabar or Port Harcourt, it will get to Suleja depot and from Suleja they will distribute to filling stations within Abuja. They don’t have enough products,” he said.

    Alaku added that marketers who were yet to lift their products from the depots after paying the old price would have to balance the deficit. He noted that the settlement of the differential also contributed to the continuing scarcity.

    “You know some people paid the old price and now that the price has changed, they have to pay the balance. If you paid N86.50 and you have not loaded since yesterday, you cannot be given the product for N86.50 when you want to sell for N145, you have to pay the difference, and marketers would not pay in time. These are some of the challenges,” he said.

    Meanwhile, a visit round the metropolis showed that most petrol stations were under lock and key, with a few independent and major marketers selling the product for N145 per litre.

    Following the scarcity, the usual long queues were persistent resulting in the blockage of some roads. Black marketers were also in active business, with some selling at N350 per litre.

    Motorists, however, lauded taxi drivers who were yet to raise their fares despite the hike.

  • ‘LPG scarcity imminent’

    ‘LPG scarcity imminent’

    Another round of Liquefied Petroleum Gas (LPG) scarcity is imminent, unless the Federal Government takes urgent steps to avert it, The Nation learnt at the weekend.

    LPG  dedicated vessels have not come to Lagos from the Nigerian National Liquefied Gas (NLNG) in Bonny, Rivers State, in the last five weeks, fuelling speculations of an impending scarcity.

    Sources close to Apapa Jetty in Lagos, said the Federal Government has been using the jetty for the supply of petrol, making it difficult for LPG vessels to berth in the jetty.

    “For weeks now, no single LPG vessel has berthed in Apapa jetty in the last one month, owing to the fact that the Federal Government has given the jetty consideration to deliver only PMS. It is only NAFGAS that supplies LPG in a smaller proportion. The situation is becoming worrisome as LPG distributors, mainly oil marketing companies are unable to get the product and supply the market,” a source said.

    The source, who spoke on condition of anonymity, said there was a vacumn in the market which must be filled as soon as possible, if scarcity must be averted.

    “What I know is that vessels have not been coming to supply LPG in recent times. Even, if a vessel arrives Lagos this weekend, its content is going to be rationed among the users,” he added.

    However, a worker of MRS Limited, Olarenwaju Johnson, said he was not aware of  the development.

    He said vessels have been discharging fuel in Lagos, stressing that marketers are selling the product.

    It would be recalled that Oando and other major oil marketing companies are supplying LPG to the market. The firms have opened outlets across the country, in order to make more people use the product.