Nigeria: Fuel Queues Return to Abuja

Fuel queue used to illustrate the story.

Fuel queues were witnessed in parts of Abuja, the Nigerian capital, on Friday.

As the queues surfaced, the Nigerian National Petroleum Corporation (NNPC), promptly released a statement urging Nigerians against panic buying of petrol.

The NNPC, which has been battling for months to contain a possible disruption of fuel supply as a result of a rising imbalance in the cost of fuel import and distribution, moved Friday afternoon to douse speculations about the scarcity of the product.

The fuel queues also surfaced says after Nigeria's finance minister, Zainab Ahmed, said the federal government would consider a gradual removal of fuel subsidy.

On Thursday, the International Monetary Fund (IMF) Managing Director, Christine Lagarde, criticised the expenditure of $5.2 trillion in Nigeria and other countries on fuel subsidy since 2015.

Mrs Lagarde, who was speaking at a news conference at the ongoing joint annual World Bank/IMF spring meetings in Washington DC, urged governments, including Nigeria, to remove fuel subsidy and direct the money to the provision of social amenities.

According to the IMF official, with the low revenue Nigeria was generating, removal of fuel subsidy will save enough funds to provide the social needs of the people.

"We believe removing fossil fuel subsidies is the right way to go. If you look at our numbers from 2015, it is no less than about $5.2 trillion that is spent on fuel subsidies.

"As far as Nigeria is concerned, with the low revenue mobilisation that exists in the country in terms of tax to the gross domestic product (GDP), Nigeria is amongst the lowest. A real effort has to be done in order to maintain a good public finance situation for the country.

"If that was to happen, then there would be more public spending available to build hospitals, roads, schools, and to support education and health for the people," she said.

Asked later to comment on the IMF MD's advice, the Minister of Finance, who was also attending the meeting, said the federal government was considering a gradual removal of fuel subsidy as part of strategies to boost revenue.

"It's good advice. But, we have to implement it in a way that (it) will be successful as well as sustainable. We are not in the position to wake up one night and just remove subsidy. We have to educate people. We have to show Nigerian citizens what the replacement for this subsidy will be.

"So, we have a lot of work to do because subsidy removal has to be gradual and the public has to be well-informed," Daily Post quoted the minister as saying at the sidelines of the meeting.

The federal government spends several billions of naira on a contentious 'cost recovery' programme aimed at stabilising fuel supply.

The 'cost recovery' is a term the Buhari administration uses to describe its subsidy on petrol, largely paid to the NNPC which is now the sole importer of the product.

Concerns about rising fuel subsidy have been on for several months. But, the government defended the action in the build-up to the last presidential election. Vice President Yemi Osinbajo said at the vice presidential debate that the Buhari administration would not remove the subsidy because it would lead to a major increase in the prices of goods and services. He said the government could consider a gradual removal of the subsidy if re-elected.

Mr Buhari was re-elected president for a second term in February.

Dousing Tension

In a Friday statement urging consumers to discountenance the rumour about an impending fuel scarcity, the NNPC spokesperson, Ndu Ughamadu, urged Nigerians to disregard the rumour which he attributed to the purported refusal by some oil marketers to lift products from depots.

According to Mr Ughamadu, the tale about fuel scarcity was "fabricated by mischief makers with intent to create undue panic in the prevailing sanity in the fuel supply and distribution matrix across the country."

He said the NNPC has over one billion litres of petrol in stock, while fuel imports of 48 vessels of 50 million litres each "have been committed for the month of April 2019 alone".

"There is no need for panic buying or hoarding of petroleum products in anticipation of a phantom scarcity," the NNPC spokesperson said.

The Trigger

However, PREMIUM TIMES investigations revealed that the fuel queues in Abuja may also have been triggered by the alleged inability of fuel marketers to lift products from the Suleja fuel depot, which services Abuja and environs.

For the most part of Thursday, tankers that were at the depot to lift products were unable to do so due to the Petroleum Equalisation Fund (PEF) server, which became faulty.

The server is used at the depot to capture the records of all tankers and marketers that lift products.

Due to the faulty server, our reporter gathered that all the tankers that were at the depot to lift products were unable to do so.

However, normalcy was said to have returned gradually late on Friday after the officials at the depot decided to resort to manual method to load the tankers.

A source close to the depot confirmed normal lifting of petroleum products from the depot has since been restored, as the server was eventually repaired.

The source requested his name should not be disclosed, as he was not authorised to speak on the matter.

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