3 January 2018

Nigeria: Presidency, Stakeholders Constitute Committee to Avert Future Fuel Crisis

Photo: Premium Times
Fuel queue.

Abuja — For several hours on Tuesday, the Minister of State for Petroleum, Ibe Kachikwu, Chief of Staff to President Muhammadu Buhari, Abba Kyari, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Maikanti Baru, and oil marketers, met in the State House to brainstorm on the recent fuel crisis and proffer a lasting solution.

The meeting called by Kyari and attended by leaders of Depot and Petroleum Marketers Association of Nigeria (DAPMAN) and their Independent Petroleum Marketers Association of Nigeria (IPMAN) and Major Oil Marketers Association of Nigeria (MOMAN) counterparts, was spurred by fuel scarcity which stalled joyful celebrations of Christmas and New Year in December.

The meeting was held in the conference centre of the old Banquet Hall of the Presidential Villa.

Speaking with journalists after the meeting, Kachikwu said the meeting was called to critically examine issues revolving around the scarcity with a view to finding a lasting solution to the menace of fuel scarcity in future.

He said the meeting was useful as it provided the platform to brainstorm on the development and ensure that Nigerians do not go through similar pain and trauma they went through in December.

He said it was against that background that the committee set up and chaired by him would continue with the meeting today in his office as he listed members of the committee to include: Baru, Ministry of Petroleum parastatals, members of DAPMAN, IPMAN, MOMAN and labour unions.

He also said if there is incriminating evidence against those who orchestrated the fuel crisis, they would be duly punished.

"This meeting was called that involved literally all the players in oil industry. The GMD, DG, DSS, DAPMAN, IPMAN were there. The whole idea was to do a centric analysis of what really went wrong. Like you know, for over two years, we have been out of this petroleum crisis.

'It's been working well, NNPC has been managing it properly and suddenly, there was this gap. So, they wanted us to put heads together to find out what went wrong. It is not a fault finding meeting. How do we take correcting measures to avoid that and what are the things that are creating the difficulties in the system?

"Because fuel scarcity has been ever lingering. It's been 30, 40 years old thing and I think it is to the credit of the president and his government over the last two years that we haven't had any of this through his policy that he has enunciated.

"So that was the objective of today's meeting. Everybody gave ideas, everybody was collaboratively finding solutions. The GMD started by presenting what the scenario was. At least for now, it has taken away the fuel queues that you see. Then dig into the long term solutions and everybody contributed.

"We set up a committee which I will head. Members included: the GMD, most of the parastatals in the ministry, DAPMAN, IPMAN, MOMAN, labour unions, and we are to meet in my office tomorrow and dig deeper into this thing and find a long term solution.

"This is a major concern, that Nigerians should not be made to suffer; that Nigerians do not get through the kind of thing they went through this December. We want to find lasting solution and that is what the committee will come out with in the resolutions tomorrow.

"I feel your pain, we share in those pains but we are going to find lasting solution. There are people who are culprits. They will be identified. In fact, the chief of staff instructed that specific names should be put on the table. Those who have gone against the rule, done certain things that are against the book should be punished. But the greatest difficulty in Nigeria is that people make allegations.

"When you then ask for evidence, everybody now goes back into the safety nets. You cannot prosecute except you have evidence. I'm 30 years old as a lawyer. So, we will need to find that evidence. We will definitely punish those who were behind the things that are wrong, but more fundamental, and more importantly is that we want to find lasting solutions and we all want to work more collaboratively," he said.

Also speaking, Chairman of DAPMAN, Dapo Abiodun, confirmed that the committee set up would come up with a lasting solution to fuel crisis today as he listed emerging problems that might have orchestrated the crisis to include the decision of NNPC to deprive oil marketers of the opportunity of importing fuel as had been the case in the past.

According to him, whereas the oil marketers used to import 60 per cent of petroleum products into the country in the past, fuel importation is now the exclusive preserve of NNPC.

He also said whereas fuel is sold at N145 per litre in Nigeria, in neighbouring countries of Ghana, Niger and Benin Republic, oil is sold at $1, an equivalent of N360, pointing out that the development might have resulted in diversion of petrol to Nigeria to such countries with the aim of maximising profit.

Abiodun said it was impossible for oil marketers to import fuel and sustain the sale of the pump price of petrol at the rate of N145 per litre.

"A lot of issues were raised and a committee was constituted that will meet tomorrow under the chairmanship of the minister of petroleum to further go into the nitty gritty and to ensure that these problems do not reoccur again.

"From our point of view as marketers, we made our submission known to government and we emphasised the fact that this was not a marketer-related problem. There was no hoarding on the part of any marketer. Marketers are your brothers, they are Nigerian citizens, they are businessmen, no marketer makes money from hoarding petroleum products, our business is to take petrol and sell.

"We explained that the problem that you saw is not willful on the part of anyone either NNPC or marketers. The situation from our point of view is that from January to December, the price of crude remained relatively stable following the hurricane Katrina.

"In the month of September - October, crude prices went up and marketers lost the ability to import and sell at N145 per liter. Since the price of crude is directly proportional to refined product, we could not import petrol and sell at N145 any more. And this business is a partnership between marketers and NNPC. Marketers bring in a certain volume and NNPC also brings in a certain volume.

"In the past, marketers brought in about 60 per cent while NNPC brought about 35 to 40 per cent. But by the month of October, marketers completely stopped importing because there is no more subsidy. So, we can't sell for profit. So, we have to stop importing. So, the burden of importing 100 per cent now fell on NNPC.

"So you can imagine a situation where NNPC was importing in part and marketers were importing in part and then suddenly, NNPC begins to import 100 per cent coupled with the fact that in the months we call the ember months, from October to December, the consumption of petrol is highest in the country.

"So, you now have what we call a double warning. NNPC is suddenly finding importing what they probably didn't expect in terms of volume and the fact that Nigerians themselves are consuming more volume than they will normally consume in earlier months coupled with the fact that the countries that are surrounding us as a nation are all selling fuel at more than $1 per liter. $1 today is about N360. If you go to Cotonou, Ghana, Niger. So, it is not unlikely that some of our petrol is finding itself across the border to these countries.

"All these are issues we believe amounted to what we saw in December but thankfully NNPC rose to the occasion. They stepped up import, stepped up supplies. That situation has since normalised.

"Today's meeting is to ensure that this does not happen again and this we are going to continue tomorrow in the committee that was set up under the chairmanship of the minister of state for petroleum to ensure that we find a long lasting and enduring solutions to this problem so that Nigerians will not have to go through this harrowing situation again," Abiodun stated.

In his submission, IPMAN National President, Elder Chinedu Okonkwo, said they were very happy with the output of the meeting, disclosing that with the level of deliberation in the meeting yesterday, Nigerians could be assured that matters of fuel scarcity in the country have finally come to an end.

"We are glad with the promise of the Chief of Staff at the meeting. With what we have heard today from the meeting, Nigerians should go home and be glad because the issue of constants fuel supply have been resolved.

"The issue apparently, by tomorrow will be resolved as a committee will be set up to ensure that the major marketers, the independent marketers and all those that are supposed to be bringing in the products will contribute. This will solve this problem once and for all. They have also assured that the refineries are coming on stream with installed capacity. This is cheery news," he said.

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