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The Bogeyman of Fuel Scarcity The Bogeyman of Fuel Scarcity
by Kola King
2022-07-06 08:49:11
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The past week has been extremely turbulent with events cascading like the rapid movement of a waterfall. Mostly this has brought pain, tears, sorrow, and in some instances death for many compatriots. It is as though we have slipped into a dystopian society since the nation continues to reel from one crisis to another. Most of the challenges range from fuel scarcity, high cost of living, runaway inflation, attendant consequences of the naira in a free fall, kidnapping and general insecurity in the land. Plus, the studied silence and the general neglect of tertiary education by the government. Obviously, the change we voted for has not translated into an improved condition of living. Rather things have taken a turn for the worse. In short, it’s like the more things change, the more they stay the same.

booo001_400As the people groan under the shadow of insecurity, the nation has been in the throes of a self-inflicted problem- fuel scarcity. As it happens, Nigeria is the biggest oil-producing country in Africa but it has had to rely on imports of refined petroleum products from abroad because its refineries are comatose. According to recent reports, Angola has overtaken Nigeria as the biggest oil producer in the continent, due in part, to rampant oil theft and pipeline vandalization. Like a recurring decimal, fuel scarcity has proven to be the Achilles heel of most administrations. The nation has been battling with fuel scarcity in the past few weeks with motorists spending several hours in the queue in a bid to buy fuel. This has thrown the nation in turmoil as many commuters and motorists groan and struggle in a bid to grapple with the problem of fuel scarcity.

In the midst of all this, there’s been the usual blame game between the government and the Independent Oil marketers. However, the Petroleum and Natural Gas Senior Staff of Nigeria (PENGASAN) has thrown some light on this sticky matter. According to the  President of PENGASAN, Festus Osifo, NNPC has enough buffer stock to last more than thirty days; hence he declared that the scarcity is artificial. Speaking on a Channel Television programme, he said, “As of today, we’ve close to 2 billion litres of PMS, so the problem is not the stock,” Osifo said. He attributed the ongoing fuel scarcity across the country, particularly in Lagos and Abuja to the issue of ‘bridging funds’ between the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and truck drivers who deliver the Premium Motor Spirits (PMS).

Osifo said, “The NMDPRA is the one administering a bridging fund. At a particular time, they agreed with truck drivers that the bridging fund is going to be about N10 per litre depending on the destination you are going to all over the country.

“As at when they agreed, the cost of diesel was about N250 per litre, so it was fashionable and the N10 was a bit okay, but today, the cost of diesel is over N700. It has tripled. So, the expectation from the tanker drivers is that since the cost has gone up, instead of paying them N10.40kobo as the case may be, you’ve to multiply it by three.

Furthermore, Osifo said, “One of the issues again is that today, NNPC is the sole importer of Premium Motor Spirits (PMS), so they import PMS into the country, and this PMS is brought to the high sea, so they rent some smaller vessels to bunker the PMS and take to the various tank farms or depots. So, if it is the NNPC depots and you’re loading from the NNPC depots, you’re going to pay about N148 as the ex-depot price. But some of the PMS are also stored in private depots and those private depots don’t sell to the retailers for 148; they add some premium to it, at the end the of the day, they sell between 152, 155, 160 and 162.”

At the same time, the oil marketers on their part complain about the landing cost and other ancillary costs associated with the importation of refined petroleum products which has forced them to jack up the price of petroleum products, passing off the extra charges to motorists and consumers.  

At the centre of the government’s ineptitude and bungling are the consumers who are forced to buy petroleum products at the rate of 185 to 200 naira per litre, depending on the location of such consumers, instead of the official rate of 165 naira per litre. In fact, in some parts of the north and southeast region petroleum products are being sold between 200 to 300 naira per litre while diesel cost 800 naira per litre. The Lagos Zonal Chairman of IPMAN, Akin Akinrinade, noted that it’s no longer feasible to sell petrol in Nigeria at the recommended price of N165 to a litre, adding that the landing cost of petrol was between N175 to N178 to the litre.

On the other hand, members of the Nigerian Association of Road Transport Owners (NARTO) have threatened to down tools, citing the high cost of diesel and the poor conditions of the highways. National President of NARTO, Alhaji Yusuf Lawal Othman called on the government to review the freight rate payable to transporters and rehabilitate the roads that had become death traps and sources of major accidents, especially among haulage trucks. Originally the freight rate was 10 naira but has been reviewed upward by 26 percent in 2020, he disclosed.

He said members are groaning under intense and harsh operating conditions occasioned by an acute shortage of working capital for the efficient running of their transport operations.  Most often without due regard to prevailing economic and market conditions, worse still, these payments are received by transporters in arrears, usually, 3-5 months after the products were delivered, he said. Yusuf Othman expressed regret that despite presidential approval for a review by 26 percent, the first initial payment of 10 percent was adopted. However, the crux of the matter is that the balance of 16% was yet to be implemented, which has thrown the operations of transporters in jeopardy.

He said it should be clear that the current freight rate payable is not only inadequate but unsustainable for continued operation of transporters.  There is no doubt that transporters would find it difficult to operate under this condition. It is on record that over 98% of petroleum products are transported by road today, he declared.

Moreover, he maintainted that the pipelines have not been operational for years while the railways, despite their rehabilitation, are yet to commence operations. In addition, the current PMS scarcity is partly, caused by a lack of funds to run the trucks profitably.  “To this end, many transporters have decided to park their trucks, and I am sure that many more will park theirs in due course if something drastic about increasing the freight rate is not promptly done,” he stated.

At the heart of this problem is the government’s failure to fix the refineries after about seven years in power. This negligence on the part of the government is inexplicable. On top of that, the billions of naira expended on turn-on-around maintenance and repairs of the refineries have been money down the drain. In short, the refineries have been a drainpipe of waste and corruption. Thus taxpayers have not gotten value for money despite the billions spent on the rehabilitation of the refineries.

At bottom, the government should redouble efforts toward fixing the refineries. At the same time, a flexible template should be provided by the relevant government agencies for bridging funds for NARTO members, taking into consideration the volatile oil market and the escalating price of diesel, which is used in trucking fuel to most parts of the country.   The truth is there's no running away from fixing our refineries if at all the bogeyman of fuel scarcity is to be finally laid to rest.

First published for Metro

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