12 March 2014

Nigeria: Fuel Scarcity - Petroleum Minister Insists On Privatisation of Refineries

Abuja — MINISTER of Petroleum Resources, Mrs. Diezani Allison-Madueke, has said that the only solution to the problems in the petroleum industry, especially the scarcity of petroleum products, was the privatisation of refineries in the country.

She assured that the fuel scarcity that had rocked major cities in the country in the last two weeks would come to an end within the next one week.

Her assurances came as the All Progressives Congress, APC, accused the Federal Government of acting out a clandestine script to increase fuel prices through the back door, saying the ongoing nationwide fuel scarcity might have been induced to make higher fuel prices a fait accompli for Nigerians.

The Minister spoke, yesterday, when she appeared before the Joint Senate Committee on Petroleum Resources (Upstream, Downstream and Gas) to defend her ministry's 2014 budget, in company of senior officials of the ministry and heads of agencies under her supervision.

Allison-Madueke, who said the process of privatisation would have been concluded if the various trade unions within the petroleum industry had not protested the action, however, said the Federal Government was continuing with the rehabilitation of the refineries.

She said: "The way forward is the privatisation of the refineries because government should not be involved in the business of fuel sales. I wouldn't call the current fuel shortage, a recurring development because there has been no shortage in the last three years until two weeks ago.

"The shortage has a lot to do with a number of issues. First, there seems to have some scare or rumour that the Federal Government wanted to increase the pump price of petroleum products and I have said it categorically that the Nigerian government had no intention of increasing the pump price of petroleum products, anytime in the near future. That is for certain.

"Second, whether it is as a result of rumour or supply issue, there was a certain level of burden and we found out too that there was a certain level of diversion of petroleum products.

"All of these we are trying to ensure that they are brought to an end very shortly and as a result I have been going out to monitor the fuel distribution and talk to petrol station owners in Lagos and to consumers as well just to get an understanding of where they had the worse shortages over the last couple of weeks.

"But it is coming under control now, we will be flooding the market with petrol over the next few weeks and beyond to ensure that whatever it is that is causing the shortage, whether it is fuel diversion or rumours of pump price increment, it will be stopped by force and we will ensure that those found to be actually diverting fuel or hoarding even after all that we had done, during the period, will undergo punitive measures.

"If we have found a filling station on our list to be diverting or hoarding, no matter who owns the station, whether it is owned by the NNPC, they would face the same punishment."

She said that her ministry had implemented 87 per cent of its N60 billion budgetary allocation in 2013.

She said: "We gave implementation figures based on what was released to us. In terms of what was released to us, we performed based on that fairly well to the tune of about 87 per cent implementation based on the actual releases. The portion of the funds that was not released to us cannot be used as basis for performance.

"In terms of 2014, we have a budget figure of about N60billion for the entire ministry both recurrent and capital expenditure. Unfortunately recurrent takes a lot out of every budget in the system. The capital is much less but we intend to move forward as much as we can by ensuring that all the ongoing projects are completed while new projects like LPG framework are carried forward."

The Minister said the ministry was faced with the challenge of funding, inadequate facilities, sabotage and vandalism, oil theft and oil spill, adding that all these affected the nation's resources.

"In 2013, of the N60.9 billion appropriated, N50.4 billion was personnel cost, N1.8 billion overhead cost, while N8.1 billion capital cost," she said

On the N512 million PIB enlightenment campaigns, she said the amount was spent on jingles, publicity and other related issues.

But the Committee Chairman, Senator Emmanuel Paulker who was not satisfied with the explanation on how the N512 million was spent, told the minister to put details of the expenditure in writing.

But the All Progressives Congress, APC, would not have any of the minister's assurances on increase in the pump price of petrol, accusing the Federal Government of acting out a clandestine script to increase prices through the back door.

According to the party, the ongoing nation-wide scarcity may have been induced to make higher fuel prices a fait accompli for Nigerians.

In a statement issued in Lagos yesterday by its Interim National Publicity Secretary, Alhaji Lai Mohammed, the party said the fact that the scarcity had persisted, despite the claims and counter-claims by the government and the oil marketers, and the measures purportedly taken by the government to ameliorate the situation, was the clearest indication of official deception.

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