7 December 2017

Nigeria: FG Blames Fuel Scarcity On External Demand

Photo: The Guardian
Oil refinery (file photo).

- Orders Kachikwu, Baru to remedy situation

- Insists no plan to increase pump price

-Confusion in PPPRA over pricing template

The Federal Government has blamed the ongoing fuel scarcity on increased demand by nations in temperate regions.Addressing State House correspondents after a Federal Executive Council (FEC) meeting at the Presidential Villa, Abuja, yesterday, Minister of Information and Culture, Lai Mohammed, said: "This is winter period. There is always more demand for refined products from petroleum ‎during winter in the colder countries. This is what we are experiencing now."

Notwithstanding, he said the Council directed the Minister of State for Petroleum Resources, Ibe Kachukwu and the Group Managing Director (GMD) of the Nigeria National Petroleum Corporation (NNPC), Maikanti Baru, to end the situation before the end of the week.Mohammed also insisted: "The government has no intention at all to increase the pump price of petrol."

Marketers meanwhile are blaming the NNPC for alleged favouritism in distribution of petrol.The Department of Petroleum Resources (DPR) monitoring team visited five depots: Obat, Sahara, Nipco, Dee Jones and Aiteo yesterday and discovered an uneven allocation of products.

Consequently, the Assistant Director, Retail Outlets Monitoring, Downstream Division, DPR, Mrs. Ijeoma Otti-Onyeri, who led the team, compelled private depots with products to give priority to Lagos State in order to end scarcity.She ordered that 80 per cent of what was being loaded should be delivered to Lagos.

It was revealed during the visit, a total of 51,702,000 litres of petrol was in stock at Nipco, Sahara, Aiteo and Obat depots.

The DPR delegation urged Nigerians not to panic, saying there was enough stock for the next seven days. This was after disclosure that the PPMC was expecting two vessels in the next 48 hours.

Also, the Independent Petroleum Marketers Association of Nigeria (IPMAN) said the inability of the NNPC to pump petrol to the Ejigbo satellite depot was aggravating the scarcity in Lagos.She said: "There is panic buying because there is speculation that there will be increase in the pump price of petrol. That is why we have to monitor depots, to find out if there is fuel.

"From what we have seen in Obat, Dee Jones, Sahara, Nipco and Aiteo, we have observed that all these depots have stock that can last for five to seven days." She called on marketers who complained they were buying petrol at N141 per litre to show evidence, so that the DPR could act.

The chairman of IPMAN Lagos zone, Balogun Alanamu, said the NNPC management should be blamed for fuel queues across the country.

Alanamu, who is also the chairman of Ejigbo satellite branch of IPMAN, said the management of NNPC only allocated 20 trucks to marketers on daily basis out of 150 trucks that were being loaded.

He said: "We really do not know why they are deliberately giving us inadequate supplies and supplying the private depot owners. These people are selling to us above the recommended ex-depot price of N133.38 kobo per litre. NNPC officials are collaborating with the private depot owners to create artificial scarcity. They give the products to them. The private depot owners in turn sell to middlemen in bulk, who will later sell to independent marketers at N143 per litre."

He added: "They are hiding behind these marketers to defraud us. They said they gave the product to private depot owners at N117 per litre ex-depot price. We expect they will sell to us at N133.38 per litre but they are not. And NNPC is not doing anything about it. We raised this issue at a recent seminar two weeks ago where Baru was represented. We implored him to investigate if we were lying. We also presented him with evidence, yet, nothing happened."

In Abuja, motorists have turned to bribery and the black market to fuel their vehicles as most petrol stations are either under lock or are attended by long queues.Those who spoke with The Guardian yesterday expressed worry that the situation was getting out of hand.While most stations sold at official rate, the price hovered between N250 and N300 per litre at the black market in the Garki area.

A motorist, Kingsley Aruma, said he tipped petrol attendants before he was allowed into the Nigerian National Petroleum Corporation (NNPC) retail station along Kubwa expressway.He said: "I went to three fuel stations before I decided to go to NNPC along Kubwa expressway. The queue was so long. This is not the first time we are seeing long queues in Nigeria and nothing is being done. People are already hawking and hoarding fuel."

Another, Ngozi Amenike, said she had been on a queue for about 30 minutes, decrying loss of productive hours. "This is not the place where I buy fuel. But the queues in other places are longer. This has deprived me of my work for today. I have been out of the office to try my luck," she said.

Mathew Musa, who was on queue in Garki, Area 11, said he spent about two hours trying to gain access into the station. He urged the government to address the situation, saying it was already getting out of hand.But Baru insisted the country had enough petroleum products to meet demands even beyond the festive period, urging people to avoid panic buying or storing products in their cars or homes.

He said the corporation had addressed the issue of marketers who were selling at higher prices. "We were able to go with regulators who clamped down on depot owners that are selling at a price above N133 per litre. There is sufficient product and there are trucks in most of the filling stations. It is just this panic.

"I have more than 30 days' supply of fuel, even if I don't import a drop. We have sufficient product to take us to January. Everybody should go and rest. As I am talking to you, I have six ships that are discharging over 200 million litres, in addition to the 30-days supply.

"Nigerians should feel comfortable and go about their businesses. Please, do not put fuel in jerry cans and keep them in cars as you drive. It is very dangerous. I am guaranteeing you that there is fuel in every station."

Black marketers have resurfaced in Port Harcourt and Lagos, wishing the scarcity would linger. They expressed joy over the situation, saying it could not have come at a better time. They openly displayed their plastic containers near filling stations along Ada George road, Ikwere, Aba road axis in Port Harcourt, and along Airport Road, Lagos.

A litre of fuel was sold between N180 and N200, amid fear the price could rise to N250.One of the marketers, Mrs. Chizitere Amadi, said: "We are happy that fuel scarcity has hit the country again. We usually make good money from this. Christmas will be colourful this year, if the trend continues."

Another marketer, Kingsley Friday, said: "As a graduate, I have applied for jobs without success. So, the fuel business makes me smile to the bank. I make good money. I pray it continues, since government has failed to provide us with jobs."

The few independent marketers that sold fuel in Port Harcourt did so at N160. Major marketers still sold at N145 per litre but had very long queues.Yesterday, the Petroleum Products Pricing Regulatory Agency (PPPRA) that is responsible for regulating petroleum products remained silent as policy somersaults by the Ministry of Petroleum threw the agency into confusion. The Department for Petroleum Resources (DPR) and PPPRA also failed to commence on-the-spot monitoring of petrol stations outside of Abuja to ensure compliance with regulated prices.

The 'price template' link of the PPPRA website was left empty with no figures indicating the various aspects of the pricing template. The present fuel scarcity, according to some analysts, is partly caused by the confusion created by the introduction of price modulation regime by Kachikwu in 2016.

The Executive Secretary of the agency, Abdulkadir Umar has remained silent while high-ranking officers of the agency did not pick up their phone calls to explain the possible reasons for fuel queues in some parts of the country.

Terhemba Daka, Collins Olayinka, Kingsley Jeremiah (Abuja), Ann Godwin (Port Harcourt), Sulaimon Salau and Tayo Oredola (Lagos) and Emmanuel Ande (Yola)

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