Sopuruchi Onwuka — Preparations on ground strongly show that the much expected and controversial commercial deregulation of the Nigerian petroleum market may come under full implementation by November.

Government has already activated the process last Monday by notifying the petroleum products marketers in the country to be on alert; muster additional throughput, distribution and retail capacity to wheel around huge volumes of products to avert supply gaps; and inject more efforts in importing more products.

The Department of Petroleum Resources (DPR) which summoned the marketers to an emergency meeting in Lagos directed them to stand ready to ensure products availability in the last two months of the year when deregulation is expected to take off in the midst of high demand for fuel in the country.

Director of DPR, Mr. Billy Agha, who addressed the marketers, declared at the meeting that government viewed the deregulation policy as not only as a national economic strategy but also as industry imperative.

Earlier on Friday in Abuja, Dr. Lukman gad said the full implementation of the deregulation policy was inevitable, insisting with emphasis the decision was irreversible.

Both the DPR Director and the minister neither confirmed nor denied the November date for the kick off of the policy, probably in sensitivity to the mounting public outcry against the measure which will inevitability trigger inflationary tends in the economy and further impoverish the masses.

As a precautionary measure, government is directly undertaking delivery of 128 cargoes of various petroleum products in the period to ensure that internal economic circumstances affecting the import capacity of marketers do not create supply gaps that might scuttle the deregulation process.

Of the total cargoes, 90 are be petrol, 28 are kerosene while the rest are diesel, all transportation fuels.

Investigations showed that Nigerian National Petroleum Corporation (NNPC) has in the last two weeks been moving products from its coastal storage depots and strategic stock holdings to inland depots in preparation for supply surge as soon as the deregulation kicks off.

The corporation is also fast-tracking processes to re-stream the Warri and Port Harcourt Refineries as a measure in tackling the supply challenge from all fronts. The two refineries have a combined capacity to process 235, 000 barrels of crude per day.

According to Mr. Agha, the intervention of government in importation of products at this time was in realization of the falling private imports in view of urgent need to ensure robust fuel supply in the country "within this critical period."

He said government was no longer comfortable with observed decline in requests for permits to import petrol and domestic kerosene by both the major and independent marketers who had in the past been prolific with cargoes.

"It is our fear that in the event of not being able to flood the markets, as anticipated during this critical period, the supply chain will be affected which may lead to scarcity, hoarding of products, diversion and other associated ills of scarcity, the most notable of which is the reduced truck load-out from storage depot and facilities.

He pointed out that the past few weeks was fraught with reports of products scarcity in various parts of the country.

Business Champion also gathered that the Minister of Petroleum Resources, Dr. Rilwanu Lukman, has directed the Petroleum Products Pricing Regulatory Agency (PPPRA) to speed up defrayment of all outstanding subsidy claims submitted by the marketers in order to address their grouses about the deregulation process and win their support.

We gathered that N24.7 billion out of the total debt was disbursed to the major marketers on Monday, a move that was programmed to coincide with the meeting with DPR while the rest of the payments must be made before the end of the month.

As the dreaded deregulation approaches, Mr.Agha said, DPR has spread its tentacles to effectively monitor the product movement in the market "to ensure that that products distributed to dispensing points are made available to the public as intended.

In injecting the elements of threat, he said the regulatory agency would not hesitate to impose necessary sanctions against erring marketers found violating the law.

He also appealed to the public not to engage in panic buying as a measure, assuring that whereas initial product importation by government would ensure availability of products, the long term target would be to evolve a market structure that would guarantee freedom of several competing marketers competing to import and export products.

He said government was pushing deregulation to afford marketers the opportunity of independent importation into their installations, depots and jetties for sale at competitive prices to the public.

He enjoined the marketers to embark on facility upgrade for the expected improvement of supply and enhanced business opportunity which must be only fair to the consumers in the country. He said accelerated approval would be given to any marketer that applied for facility expansion under the deregulation process.

The marketers form the strongest private sector support to government in the campaign for complete deregulation of the domestic fuel market. Yet they wore long faces and expressed reservations over the current attempt at deregulation.

They have partnered government in the initial campaigns for deregulation of the market and have partly sponsored the campaigns. They are also the greatest beneficiaries of the subsidy arrangement under the Petroleum Support Fund administered by the PPPRA. Consequently they are owed huge volumes of money by government.

Vice Chairman of Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Captain Emmanuel Iheanacho, who spoke first, pointed out that uncertainties and contradictions in the action of the government over the deregulation policy.

He said while the DPR has continued to urge the marketers to import, the PPPRA on the other hand has discouraged importation of the regulated products by withholding approvals that would returns on the investments.

According to him, the continued involvement of the Nigerian National Petroleum Corporation (NNPC) in the market supply arrangement threatens state monopoly and imperfect competition, arguing that private entrepreneurs would not survive the same level of risk exposure when competing with a government agency in the same market.

He flawed the method of engagement adopted in briefing players in the market about the future of the business, stressing that a consensus among the policy makers and the market players on how to transit from regulated pricing regime to commercial liberalization would have been a perfect approach.

He made it clear that the massive imports by NNPC would further consolidate its domination of the market and enthrone state monopoly right from the inception of the deregulated market.

On his own the Managing Director of African Petroleum, Mr. Tunde Falasinu, decried the inability of the marketers to obtain approvals from the PPPRA to import transportation and domestic fuel products since the deregulation campaign intensified, adding that uncertainties and freeze of approvals have made it difficult to take business decision and also count for the declining import by private marketers.

According to him, it would be difficult for public liability companies to stake shareholders' funds in importation under such uncertainties.

Deputy Group Chief Executive of Oando Plc, Mr. Mofe Boyo, made it clear that supply to the market under a deregulated price regime would not have been an issue if government had met its obligations to the marketers as when due under the PSF arrangement, pointing out that huge subsidy debts and the credit squeeze in the economy have decimated the financial capacity of most marketers to fund importation of products.

According to him, serious bottlenecks and facility inadequacy also exist in the import throughput chain, explaining why the massive import by NNPC would not yield the desired effect if the marketers are not carried along in the whole arrangement.

He made it clear that the import reception facilities, including jetties would not be enough cater for both private and private imports when they remain dominated by NNPC.

Chairman of DAPPMAN, Chief Sylvarius Okoli, also decried the shroud of secrecy over the date of effective take off of the policy implementation, saying that it has made it difficult for the private importers to plan ahead of time.

He said such disclosures would be required to make business calculation on the expected arrival of imported cargoes to determine whether the imported products would be sold at subsidized rates or at full market value so as to determine the terms of funding.

Executive Secretary of Major Oil Marketers Association of Nigeria (MOMAN), Mr. Thomas Olawore, warned that NNPC would not be able and does not have the efficiency for effective distribution of products across the country without the private sector collaboration in market supply.

He argued that it was a blunder for the PPPRA to stop the marketers from importation at a time NNPC was on shopping spree for fuel abroad. He warned that low private import orders might create supply gaps as yuletide approaches.

He canvassed for import approval for the private marketers in the interim just as has been approved for NNPC if government was keen in market turgidity during the deregulation phase and beyond.

In putting spirited argument in favour of government, Mr. Billy Agha assured marketers that government would wipe off all debts owed under the subsidy regime before deregulation in order to begin the liberalized market under a clean slate.

In appealing for the support of the market players Mr. Agha stressed that government needed the support of the marketers "as the industry approaches difficult times," adding that the private sector was regarded as the government's important partner in the deregulation process.

On the concerns expressed by marketers over their strained relationship with banks due to overdue debts by PPPRA, Mr. Agha played up the role of deregulation in enduring that marketers recouped their funds directly from the market, assuring that the massive import by NNPC wad to be in the transition phase.

The grouse of the marketers would infuriate the organized labour and other consumer group's that strongly question the reason for the huge subsidy funds pumped from the national till into the pockets of the marketers.

At separate and several forums, consumer groups have consistently questioned the justification for the huge subsidy bills paid to marketers on products that sell well above the subsidy benchmarks. For instance, kerosene which is subsidized at N50 per liter sells above N115 per liter, raising questions over billions of Naira paid as subsidy on the product.

Also, whereas petrol is sold at N65 at most retail sites in urban Lagos and Abuja, it sells as high as N120 per liter in Isuochi in Abia State. Yet at no time has the marketers' subsidy claims on the products declined. Supporters of the deregulation policy, it there still are, argue that the whole essence of the arrangement has been thwarted by the marketers.

But the limited subsidy enjoined in few urban and industrial centers has kept the struggle for subsidy retention alive. And in fact, manufacturers who groan under cost escalation in the domestic business environment do not just want subsidy retention but its expansion to include diesel as a cushion for acute electricity shortage in the economy.

The strongest arguments against deregulation, however, indict government of ineptitude and mismanagement of the nation's resource wealth to the extent that the country has become a classical reference for the paradox of resource curse.

The need for subsidy arises from loss of capacity of Nigerians to pay the full cost of fuel due to pervasive poverty associated with economic environment marked by lack of basic infrastructure, social services and amenities, high unemployment rate and basic means of life including food, shelter and clothing.

All arguments against higher fuel prices converge on the conclusion that the current state of affairs is a result of mismanagement of state affairs by corrupt governments of the past, and it does appear that the shame of massive fuel importation as the major source of supply in a key oil exporting nation in the world is being transferred on the teeming poor.