The Unending Fuel Crisis

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Thus, uncertainty over the PIB, which is supposed to serve as the grundnorm of the country’s Petroleum industry and particularly the possible date for the commencement of deregulation is seen as one  of the causes of the current fuel crisis.

As a guest on Viewpoint, a phone-in programme of a Port Harcourt based station, about a fortnight ago, Mr. Peter Esele, a former President of the Petroleum and Natural Gas, Senior Staff Association of Nigerian (PENGASSAN) and current President of the Trade Union Congress, hinted that the on-going fuel crisis would abate as early as February. On the same programme, the Rivers State Commissioner for Energy, Dr. Dawari George, while admitting that the matter was one on the exclusive list, said the state government would soon call a stakeholders meeting on how to improve the fuel situation in the state.

Less than a week later, a small army of drivers and car owners with their vehicles queuing for fuel at a filling station near the Abali Motor Park, passed their hours at the filling station expressing doubts and pessimism about every word of hope that had been raised by Mr. Esele and other persons of authority that contributed to the programme. The impromptu “talk show” of the drivers and motorist ended in a sad but familiar scenario, the filling station declared shortly after noon that they were stopping sales because they had finished the available stock. Curses and sighs that followed only reaffirmed their pessimism about the promise in Mr. Eseles’s interview in which the former PENGASSAN President analysed the fuel situation and suggested the way out of the quagmire that had stymied Nigeria’s Petroleum sector.

In a nutshell, he declared that it would be premature to deregulate the downstream sector now as the critical infrastructure for the policy to succeed was not yet in place. By Friday, last week some national newspapers were awash with reports that the Minister of Petroleum, Dr. Rilwanu Lukman had conceded that the federal Government was not ready for full Deregulation. It remains to be seen whether the Minister may after wards publish clarifications and say he was quoted out of context. However, without wavering from the governments position that full deregulation of the downstream sector was the open sesame that would lead to a regime of fuel availability and better pricing of petroleum products, the measures for the policy to thrive were not in place.

“I would like to take a look at the issue of refineries, it is public knowledge that successive governments have granted refining licences to many companies , with the hope of increasing our domestic production of refined products. But to this day no single refinery has taken off. Our analysis has led us to the conclusion that the enabling environment for the establishment of refineries does not exists in the country today. We have identified what constitutes the enabling environment and these have been incorporated in the Petroleum industry Bill.

Mr. George Ugochukwu an oil industry staff, and one of the vehicle owners referred to earlier, had cited the developments around the petroleum Industry Bill (PIB) as one of the reason he had lost faith in Federal Government’s reassurances about the fuel supply situation improving. He said he had reverted to power inverter mitigate  to the effect of perennial power shortages and uninspiring effort of government to meet its own target of generating and distributing 6,000 mega watts of electricity. He muttered curses to lament his inability to do same with his fuel need for petrol premium Motor Spirit (PMS) and Automotive Gas Oil (AGO) or Diesel.

PENGASSAN President, Babs Ogun has expressed the association reservations about the PIB and expatriate quota issues, but reservations of PENGASSAN could mean another debilitating fuel situation while some think that the PIB is  still floudering in the National Assembly.

Thus, uncertainty over the PIB, which is supposed to serve as the grundnorm of the country’s Petroleum industry and particularly the possible date for the commencement of deregulation is seen as one  of the causes of the current fuel crisis. Still, the  Minister of State for Petroleum, Mr. Odein Ajumogobia (SAN) maintained, during a recent inspection of a fuel depot in Lagos  that he would not cite any date as the date for the commencement of de-regulation as it may lead to further hoarding of Petroleum products.

It seems afterall that government is beginning to come clean on the causes of fuel scarcity in the country, said Mr. Wakama, another vehicle owner. Wakama remarked that government had finally admitted that there was   a gap in fuel supply. He averred that what  the Rivers State government may achieve with its stakeholders conference may not be much more than reducing the number of fuel cans that manifest around filling stations that claim not to have fuel and other forms  of hoarding. He wondered if the  Ministry of Energy has the capacity to do the local policing that can check malpractices that undermine distribution of petroleum products in the state.

But the bigger picture is that while the NNPC can readily supply the statistics of Nigeria’s daily fuel consumption rate, it has so far failed to meet the needs. It is becoming common knowledge that the country’s daily fuel consumption approximates 32 million litres of PMS, 12 million litres of DPK (Kerosene)  18 million litres of Ago (Diesel) and 780 metric tonnes (1.4 million litres) of cooking gas; which increase the wonder that when the NNPC elected to take full charge of the supply of the products, it did not make contingences or gradually reduce the contribution of those fuel importers it granted licenses to import more than 50 percent of the nations needs.

One of the theories peddled as the crisis bloomed late last year was that it was just a ploy to give the credibility to the federal governments case for deregulation of the downstream sector.

Even with the admission that the fuel situation, had worsened because a of gap in supply. doubts and pessimism still linger and the bogus explanation many have decided to be content with is that it is a case of corruption. Government had in the past allowed the public to assume that its official explanation, petrol-tanker Drivers strike, damage to pipelines and with increasing appreciation of the fuel importation regime, lack of credit facilities was responsible sorry state of fuel supply ans consumption in the country. In fact, the NNPC was severally quoted as saying that it had enough stock to last weeks while its fuel cargoes were on the high seas heading to Nigeria. What has come to the fore is that if its cargoes were actually on the seas they were inadequate. And its volte face to get others import the product has not produced any cheering news as the marketers are said to be claiming that they have not been issued permits, while the NNPC subsidiary, Petroleum Products Pricing Regulatory Agency (PPRA) was  adamant that the marketers still had subsisting permits with they they could import fuel the allocation for the first quarter of this year.

Hence it is rather likely that shortages will continue beyond February. Even before this apprehension the TUC like other diffident Nigerians had put its backing for deregulation on-hold. TUC President said the labour body would be disposed to deregulation of milestones and mechanisms are in place to ensure that whatever is realised from the total removal of fuel subsidy or full deregulation is put to judicious use and not used to line private pockets or fund political campaign. He lamented that there was no account of the subsidies removed in the past and there was no infrastructure or integrity to justify the commencement of full deregulation.

In the view of the president of the Nigeria labour Congress (NLC) “increasing the pump prices or even the removal of subsidies will not make any difference in the service delivery of government as long as it is business as usual”. “Why can’t the government fund refineries he queried.

“we believe that the continued importation of refined petroleum product by the government is a matter of choice. Our refineries can be fixed and remain in production only if government summons courage and does the right thing,” he added.

To organised labour government has been unable to summon the will to tackle the fuel situation especially checking the cartel that is said to be benefitting from the continued under-capacity production of the nation’s refineries.

But in the short term, former Minister of Finance and President of the World bank, Dr. Okonjo Iweala said the Nigerian Petroleum Industry needs to be made less opaque and deregulate.

“We need to pursue policies that are very transparent” we need to ensure more supply in the economy so that we don’t have a monopoly situation she said”. But indeed, what the industry actually needs, which is less emphasised, is transparency!

 

Noble Ikpamii