8 November 2009
THERE is need for the Federal Government to come out clear on its policy governing petroleum products importation and distribution in order to put an end to the excruciating pains Nigerians especially those outside Lagos and Abuja, are currently passing through to obtain these critical fuel products.
The events of penultimate weekend where Nigerians were made to stay hours on end at filling stations to procure fuel must not be allowed to persist or to repeat itself.
As at now, there appears to be some confusion surrounding the availability of petroleum products in parts of the country on account of insufficient supply/importation. Media reports had it that the supply shortage would not be unconnected with the stoppage of fuel importation by both the major and independent marketers in the downstream sector.
The decision by the major and independent marketers to stop fuel importation was a follow up on Federal Government's decision to stop the payment of petroleum support fund (PSF) to them.
According to the government, such funds will only be made available to the Nigerian National Petroleum Corporation (NNPC), which now has the sole responsibility to supply the entire nation with fuel products. This is hardly possible.
Going by this development, it is expected that the NNPC, through its subsidiary-Pipelines and Products Marketing Company (PPMC) would import refined products and make same available to the Nigerian consuming public.
At present, Nigeria consumes a daily average of 35.3 million litres or a cargo of fuel. This translates to 30 cargoes each month. Before now, the NNPC provided 15 cargoes of this monthly demand while the major and independent marketers supplied the balance.
Although the NNPC had, in a release last week, claimed that it has enough petroleum products to go round the consumers throughout the remaining part of the year, the indices on ground do not support the claim. The claim leaves a lot of gaps that do not engender confidence in the intent of government in granting the NNPC the sole right to import fuel products.
In the first instance, government appears to have rewarded the NNPC for its inefficiency at managing the country's refineries, which combined capacity of 445,000 barrels of crude per day, if optimally utilized, would have made fuel importation unnecessary. These refining plants located in Port Harcourt, Warri and Kaduna, had since the 1990s remained a cesspool of corruption with their ever-unending yearly turnaround maintenance (TAM).
The same decay that had greeted these plants is replicated in other facilities owned by the corporation including the storage tanks and the depots. In fact, the 21 depots belonging to the corporation have remained disused since the 1990s when the refineries also went dead.
Despite NNPC's claim that the depots became disused due to vandalism, the fact is that since the failed TAM carried out in Warri plant in 1994, these depots have had no products to keep. So, where will the storage capacity of NNPC come from to keep Nigeria sufficiently supplied with these fuel products? The only functional depots are the Mosimi and Ejigbo depots.
Besides, the corporation also lacks adequate facilities to discharge 30 cargoes of monthly fuel imports. As at now, the only functional jetty is the Atlas Cove which has limited capacity for throughput. The other discharge facility is at Calabar but out of use for over a decade.
It is not clear why the Federal Government had to take the decision of appointing the NNPC as the sole importer of petroleum products, despite its limited capacity to handle barely 15 to 21 cargoes of the 30-cargo monthly demand. The implication will be a shortage of almost 10-cargoes of fuel required to meet local demand. This is being optimistic that the Atlas cove jetty would be capable of clearing some additional cargoes, an optimism that lacks the benefit of hindsight.
For instance, between 1991 and 1998 when the NNPC was the sole importer of fuel products, there were hitches and routine shortages in supply. So, where does the government derive the confidence that its inefficient corporation can sustain fuel supplies before the year ends.
We are minded to suspect that the Federal Government wants to sneak the deregulation policy into the economy from the back door. That is why it has chosen to create avoidable hitches in the fuel supply chain in the country. Indeed, the scheme by the government can only ensure sustainable scarcity between now and the New year and thereafter, wearied Nigerians would be compelled to accept the introduction of deregulation of the downstream sector of the petroleum industry.
The government is being unfair to the citizenry. This attempt to sneak in deregulation is insensitive. It is also unacceptable. Government cannot claim to know it all when existing realities indicate that the life of an average Nigerian has been on the down ward slide in the recent past especially in the last 10 years of r democracy. To further deepen the affliction with an objectionable deregulation policy is, at best, counter-productive as whatever gains government hopes to achieve, would be wiped out by spiraling inflation, mass poverty and greater threat to security of lives and property in the polity.
Therefore, pending when the deregulation policy will commence, the Federal Government should restore the PSF to both major and independent marketers to enable them resume fuel importation. NNPC as an institution, has failed the nation and does not deserve the privileged status that government is according to is this fuel import hiatus.
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