Ending persistent fuel scarcity
For over two decades of civil rule in Nigeria, the country has continued to export her crude, while importing refined products, resulting in incessant scarcity and unprecedented hike in prices, unleashing avoidable hardship on the citizenry.
From 1999, and till date, the politicians have been promising to revitalise the refineries that are moribund, which ordinarily would have been the perfect solution.
On Thursday last week, it was rumoured that the government had approved a hike in pump price, communicating same to major marketers in a memo.
It was reported that fuel stations in Lagos in response to the news have started adjusting their pump price to the alleged approved N185 per litre. It was insinuated that the newly approved price came weeks after there had been nationwide petrol scarcity, leading to long queues in fuel stations since late November 2022.
Despite the fact that the Federal Government has come out to deny increasing the pump price of petrol, independent marketers have raised their price to as much as N280 per litre.
Checks on petrol situations in Abuja on Saturday morning showed that while NNPC retail stations maintained a pump price of N179 per litre, the major marketers dispensed at N180 per litre.
As most filling stations shut down due to lack of supply, long queues were noticed at the few stations selling between N179 to N190 per litre.
The government through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) had in a statement disclosed that there was no plan to hike the price of petrol.
The agency also maintained that the country had 34 days of sufficiency in stock. However, it failed to state categorically the current government approved price.
The Independent Petroleum Marketers Association of Nigeria’s (IPMAN), through its Public Relations Officer attributed the hike in the price of the product to the increase in the cost of purchasing it at the privately owned depots.
In Lagos the product is sold at between N250 and N280 per liter, while it goes for as much as N300 – N400 per liter at the black market.
The IPMAN National President, Chinedu Okoronkwo argued that the non-functional tank farms across the country continue to impact on distribution.
He lamented that, “The major area that affects us as independent marketers is distribution. We have made several presentations. Before now, we had depots, I mean land depots, both in Kano, Maiduguri, Makurdi, Port- Harcourt, Aba, Enugu, and the rest. Some of these depots have not been dispensing products for some time now, due mainly to pipeline vandalism.
“We want to say that the country has no reason to suffer fuel scarcity if the government had fulfilled its election promises of revitalizing the refineries across the country.
“We need functional refineries to stop importation and stabilise fuel price. Regrettably, it has not happened, despite over 20 years of sustained democracy.”
According to an international researcher, Nigeria has enough crude oil deposits. It can afford to sell fuel at N50 per litre and become a major exporter of finished products to other African countries if three of its refineries are working at maximum capacity. If we have like three functional refineries, all other African countries will depend on us for their fuel importation because it will be cheaper for them, thereby fetching us huge foreign revenue, jobs and stability.
IPMAN opines that the final resolution remains full deregulation of the petroleum downstream sector.
The Major Oil Marketers Association of Nigeria (MOMAN), on its own attributed the lingering fuel scarcity in the country to high costs of vessels and inadequate trucks to deliver petroleum products from depots to filling stations across Nigeria.
The marketers explained that these high logistics and exchange rate costs continue to put pressure on their operations with ripple effects on the pump price.
In a statement on Friday, the marketers said the fuel queues are caused by exceptionally high demand and bottlenecks in the fuel distribution chain.
“The major cause is the shortage and high (US Dollar) costs of daughter’s vessels for ferrying product from mother vessels to depots along the coast.
“Next is the inadequate number of trucks to meet the demand to deliver products from depots to filling stations nationwide.”
MOMAN said it sympathises with Nigerians over the challenges they are facing in the purchase of petrol at filling stations across the country.
Over the past three months, it revealed that its staff members have worked diligently at depots and filling stations to relieve the stress faced by Nigerians through the Christmas and New year periods.
“Our members have again agreed to extend depot loading hours as well as keep strategically situated service stations open for longer hours to ease access to fuels for our customers,” the association said.
It noted that it shall continue to use its best endeavours to ensure that product is sold at the pump prices approved by the regulatory authorities, despite pressure on price by demand and costs in immediate operating environment.
“A final resolution to these challenges will be the full deregulation of the petroleum downstream sector to encourage liberalisation of supply and long-term investments in distribution assets. We urge the government to work towards this end goal,” it said.
It must be noted that in recent months, especially since the government announced plans to remove fuel subsidies, Nigerians have had a hard time getting petroleum products at filling stations.
Fuel scarcity has persisted despite the government’s repeated claims that it has enough petroleum products in stock. In many parts of the country, operators of filling stations sold at prices higher than the government’s pump price.
The Nigerian Government Friday night said it has not approved any increase in the pump prices of petrol across the country. The Minister of State for Petroleum Resources, Timipre Sylva, made this disclosure even as Nigerians continue to queue for fuel in filling stations amidst reports of increase in the pump price of petroleum products.
As against the reports that the government quietly approved N185 as the new petrol pump price per litre, Mr Sylva claimed that President Muhammadu Buhari did not approve any increase in the price of PMS or any other petroleum product.
Once again, we want to re-emphasize that the country has no reason whatsoever to suffer fuel scarcity if the government had fulfilled its election promises of revitalizing the refineries across the country.
If our refineries are put to work, this would put a stop to importation, ending scarcity and unstable prices.
The new government that will be inaugurated come May 29 should take fixing our refineries as its top priority as the government of the day is in short of time and lacks the wherewithal to facilitate it.
For an immediate solution, we recommend full deregulation of the petroleum downstream sector in a way to encourage liberalization of supply and total removal of subsidy. When it’s made a competitive market, prices will fall by compulsion.
The current government at the centre who announced that subsidy will be removed finally by June this year seems to have forgotten that they’re leaving office by May 29. The government, we think “has no control” over the time they have chosen. If they mean and are serious about what they have promised, why not take action now, so that once and for all, they will get Nigerians off the hook.
