NIGERIANS are again in the throes of fuel scarcity after a brief respite. It is a frustrating return to a regime of pain which they thought had been put behind them. Until the signing of the Petroleum Industry Act (PIA) in August last year, and the unbundling of the Department for Petroleum Resources, the country had experienced a long absence of queues at petrol service stations.
However, the tumbling exchange rate of the country’s currency coupled with the subsequent restructuring of the petroleum industry architecture left the importation of the essential fuels only in the hands of the Nigerian National Petroleum Corporation (NNPC) as it then was, and the current restructured Nigerian National Petroleum Company Limited (NNPCL).
Although the NNPC and later NNPCL has often boasted of the capacity to handle the situation, after several failed attempts to revive the existing four refineries in the country, the spectacle at fuel service stations across the country in more than one year has given a lie to the capacity claim.
When the situation bites harder and the anguish reaches a crescendo, the NNPCL, the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA), Major Oil Marketers Association of Nigeria (MOMAN) and Independent Petroleum Marketers Association of Nigeria (IPMAN) – the major players in the business – will be singing related melodies from different hymn books.
Nigerians are becoming utterly confused as to what and who to believe any more, as issues surrounding the petroleum industry in the country has become ‘the more you look, the less you see’. Industry operators are no longer afraid of spinning bare-faced lies as to what is happening in the industry as the operational opaqueness has become both monumental and legendary. It does not seem to happen anywhere else like this.
Between June and November this year, more than five reasons have been given for the scarcity of products in Abuja and Lagos – the two cities where consumption is high and absence is easily noticeable.
While the NNPCL claims that essential petroleum products have never been in short supply at designated depots and blaming “occasional” scarcity on logistic challenges in the distribution network, IPMAN maintains that the products are not easily available owing to difficulty in accessing foreign exchange by marketers. IPMAN has been consistent with that position for more than six months now. It reiterated it recently, insisting that the lingering scarcity of Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO) was “due to the unavailability of the products.”
Again, while NNPCL consistently claims that it has a long line of vessels either coming in or awaiting discharge at the ports, IPMAN alleges that the NNPCL had stopped importing enough PMS (petrol), to meet demand in the country.
IPMAN claims that because of NNPCL’s incapacity, its members can no longer sell at the regulated price because the unsteady supply of petrol has resulted in higher prices at the depots. “The price of a litre of petrol at private depots is currently between N205 and N210 as against N162.50,” IPMAN claims. And, NNPCL is currently the sole importer of refined petroleum products in the country.
Because of the scarcity, marketers are now rationing fuel, particularly those in Lagos who have formed cartels, thus worsening the situation in Lagos, Abuja and other cities. All manner of people are now hawking fuel in the middle of the roads in Abuja without minding the implications. It would be difficult to discountenance the position of IPMAN given present realities.
There seem to be an operational conflict between the role of the NNPC as it then was, NNPCL as contemplated by the PIA 2021 and the role of NMDPRA in the importation, supervision and distribution of refined petroleum products in the country. The non-resolution of the assumed conflict between NNPLC, which is now an operator and NMDPRA, which is a regulator may be the untold story behind the current wave of scarcity.
The recent Senate Ad Hoc Committee Report on Oil lifting, Theft and the impact on Petroleum production and Oil revenues (November 2022) showed clearly that there are conflicting supervisory directives in respect of the roles expected of the agencies created by the PIA 2021.
So, the claim in some quarters that the transition from NNPC to NNPCL and from DPR to NMDPRA is affecting coordination of activities in the midstream and downstream sectors of the industry, and may well be the cause of the recent ugly experiences. The insight given by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) comes close to validating the position of those pointing in the direction of internal conflicts in the co-ordination of critical activities in the mid and downstream sectors.
PENGASSAN hinted that there was an issue with ‘bridging funds’ between NMDPRA and truck drivers who deliver PMS. Given the interlink between the role of NNPCL and NMDPRA in the petroleum product procurement and supply chain, there is a likelihood that there are certain clogs in the operations of both agencies causing disruptions in the supply chain and causing product scarcity in the process. This might be reason truckers often refuse to lift products. If NNPCL is insisting on the claim of availability of enough products to go round, so why is there still scarcity resulting in long and frustrating queues?
Instead of hitting the nail on the head, the Ministry of Petroleum Resources (the supervising ministry) and NNPCL have been moving from one excuse to another trying to push the burden on logistics’ challenges faced by MOMAN and IPMAN. Apparently not having much to do as NNPLC seem to have hijacked some of its roles, the NMDPRA is now struggling with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to perform crude oil terminal activities’ regulation, as observed in the Senate report.
The relevant organisations are now selling excuses rather than making fuel available. During the rainy season, it was bad roads; during the massive flooding of more than a month ago, it was the devastating flood; and now it is due to on-going road infrastructure projects around Apapa and access road challenges in some parts of Lagos.
On the latest excuse, NNPCL claims the gridlock is easing out around the Apapa area, and vessels and trucks have already been programmed to “unconstrained depots” while massive load-outs from depots to various states are closely being monitored. NNPCL had given similar hope when the flood water in Kogi, which was given as reason for the scarcity of products in Abuja two months ago, was ebbing; yet the situation never really improved.
Like insecurity, this is one area successive governments have failed to adequately address in over 30 years. Since the country started having problems with its refineries leading to lower supplies and eventually resorting to importation to augment consumption deficit, Nigerians have been left at the mercy of unscrupulous oil industry operators who benefit massively from the dysfunctional system.
The subsidy regime that resulted has become one of the fattest cash cows plundering the Nigerian landscape to the benefit of the herders in the oil and related industries. Several calls have been made for the sacking of the subsidy regime to allow for a transparent administration of the petroleum product supply lines, but successive governments have been lethargic, lacking courage and political will, cowering under pressure from activist groups and vested interests who claim the masses would be the worst for it. But the current situation does not serve the masses but the cabals in the oil fields and budget agencies.
The implications of continued fuel scarcity are legion. Apart from increase in transport fares which is spread across other supply chains, it tells on businesses that rely on constant power supply, especially in a country where public power supply is unstable. If the situation continues, it might affect the 2023 elections, in terms of logistics and other essential services.
There is yet another wave of calls for the termination of the subsidy regime as that would signal the end of the politics of the supply lines and give a new lease to local fuel production and supply activities, especially as private sector players are warming up to play in the premier league of the industry.
We support the call and urge government to speedily embrace it, and set in motion a machinery to dismantle the oil subsidy structure, completely deregulate the oil and energy sectors and allow free but monitored market interactions to determine exploration, exploitation, processing and supply of petroleum products in the country.
It would be stating the obvious to say that Nigerians are tired of waiting on long and winding fuel queues and it is high time the agony comes to an end. There will always be opposition to policy prescriptions because of vested interests. Often, such interests play up the plight of the masses as reason for opposition, but the masses which they claim to protect have consistently been the victim of such protection while the protectors smile to the banks.
The masses should wake up and interrogate issues and stop falling for cheap sentiments that would eventually become their albatross.
Comments are closed.