Nigeria: Fuel Scarcity - 'Nobody Is Indispensable,' Nigeria's Military Chief Warns Oil Marketers

Fuel queue used to illustrate the story.
1 February 2023

The NNPCL said the fuel distribution crisis was of a monumental proportion, which had taken a different dimension.

Nigeria's chief of defence staff, Lucky Irabor, Tuesday warned that the petrol scarcity across the country had become a 'security concern' and 'nobody is indispensable' in bringing a solution to the problem.

Mr Irabor, an army general, stated this at a meeting between oil regulators, security chiefs and petroleum marketers.

"The challenge of availability of fuel across the country has risen to a proportion that it had become a concern for the defence and security of our country," he said. "The government is not handicapped and I need to indicate that there are alternatives and nobody is indispensable."

At the event, facilitated by the Nigerian National Petroleum Company Limited (NNPCL), the oil industry regulators engaged the marketers and security agencies to find ways of addressing the lingering fuel crisis in the country.

The engagement was attended by Mr Irabor; Inspector-General of Police Usman Baba and Comptroller General of the Nigeria Customs Service, Hameed Ali.

Others in attendance were the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed and the leadership of oil marketers including the Major Oil Marketers Association of Nigeria (MOMAN).

Also at the meeting were the leaders of the Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Independent Petroleum Marketers Association of Nigeria (IPMAN) and Nigerian Union of Petroleum and Natural Gas Workers (NUPENG) among others.

The Group Chief Executive Officer (GCEO) of NNPCL, Mele Kyari. said the fuel distribution crisis was of a monumental proportion, which had taken a different dimension.

Mr Kyari decried the fact that Nigerian fuel was being smuggled to other countries and could only be done either by the people in the industry or those connected or buying from the operators including in marine containers.

"We have evidence that some of our customers are actually smuggling the vessels to other countries but we will get to the root of this and appropriate agency will deal with it," he said.

"We are not dealing with a supply problem, as we speak we have 831 million litres in marine and in various depots we have 738 million litres that are documented in platforms of the industry regulators. We do not have AGO problem for truck movement.

"Any time the evacuation figure goes beyond 60 million litres in the country, we have a problem. Early in 2022 due to the contamination fuel, evacuation came down to 56 million then we had a crisis, then we ramped up and achieved normalcy.

"In October 2022 when the flooding happened, trucks could not go to destinations particularly south to north, so evacuation went beyond 60 million and since then we have done possible things to keep it above.

"Therefore, there is no shortage of fuel in the market, they may be in the wrong destination," he said.

He said there were changes in some dynamics, transportation issues, logistics on vessels and handling charges which arrived at an ex-depot price of Lagos - N172, Warri/Oghara - N183, Calabar - N185 and Port Harcourt - N180 but no one kept to this.

"Instead, we had a countered submission of N186, N192, N198 while some depots range from N172 to N260 as ex-depot price. There is simply no way independent marketers will buy and not sell at prices seen across the country.

"This is the reality we are dealing with and the end results are queues. if it is not handled at the depot level, it cannot be controlled at the station level," he said.

Mr Kyari also decried the fees and levies imposed on the product that was not supposed to be which added up to the overall pain of Nigerians.

The News Agency of Nigeria (NAN) reports that Mr Kyari said the issues on pricing were receiving attention to avoid Nigerians being exploited, while a framework was being put in place to monitor products to get to their actual destination.

"With the volume that we are pushing into the market and understanding we are reaching with the marketers not to sell with greed, it will ease the situation. We regret the situation and apologise to Nigerians," Mr Kyari said.

In his remarks, Mr Irabor said the involvement of the defence and security establishment shows that the resolution of the crises in the oil and gas sector was paramount.

"I believe that the solution lies within the remit of the framework that you will be establishing and if there is no solution, I pray it did not get to a level where the alternative will be activated," the CDS warned.

Also speaking, Mr Baba described the situation as an issue of being patriotic and increasing the monitoring process of the oil distribution which posed a major problem.

"And if the distribution process has loopholes to be exploited there is an alternative to increase the level of monitoring and supervision and to that effect, it is our role to assist the NNPCL in monitoring process for lead way," the IGP said.

In his remarks, Mr Ahmed said NMDPRA had sanctioned seven erring depots two weeks ago to serve as a deterrent and also had the mandate to suspend any licence from operating without hesitation.

He urged the oil stakeholders, including IPMAN, to collaborate with them to tackle the ongoing constraint which bordered around pricing and logistics. He frowned at speculations that the authority was not sanctioning depots.

MOMAN President, Adetunji Oyebanjo, who explained that the industry did not invest appropriately in things needed across the value chain for distribution, described the situation as a critical one which had allowed sharp practices.

DAPPMAN President, Winifred Akpani, while pledging commitment, expressed dissatisfaction over the distribution and supply chain, adding that it was needless giving products to marketers who exploit and would not get them to stations.

Mr Akpani also appealed to the federal government to deregulate the product.

IPMAN President, Chinedu Okoronkwo, however, urged the NNPCL to designate certain depots for its members to manage, monitor and load, to ease the distribution problems.

PREMIUM TIMES has reported on the petrol scarcity across Nigeria with many filling stations not selling and others selling far and above the approved N165 price per litre.

In Lagos, Katsina and other states, filling stations sold the product at about N300 per litre.

The scarcity has led to the rise of the black market (roadside traders), who sell petrol for as high as N500 per litre and N700 per litre in states like Ondo.

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