Nigeria's current fuel scarcity has sparked widespread frustration, with conflicting excuses from various quarters. Meanwhile, industry stakeholders point fingers at policy failures and regulatory lapses, leaving Nigerians caught in the middle of a confusing and worsening crisis, reports Festus Akanbi
The confusion over the lingering fuel scarcity in major towns and cities in the country continued till the weekend despite the assurances of the Nigerian National Petroleum Corporation Limited (NNPCL) to clear all the problems causing the devastating scarcity before midweek last week.
Reports from Abuja, Port Harcourt, Lagos, Ibadan, and Kano showed that long queues of vehicles dotted major roads as Nigerians spent several hours waiting at filling stations without success.
The few stations that had products raised the cost of fuel to as high as N1000 per litre in Abuja, Ogun, Port Harcourt, and Kano, while black marketers sold a 10-litre container of petrol for as high as N12,000 on the streets of Lagos last week.
As expected transport fares hit the roof all over the country as many commercial bus drivers were compelled to patronise black marketers for their operation.
Season of Excuses
In the ensuing frustration and confusion, officials of NNPCL and petroleum marketers had given conflicting reasons for the embarrassing supply crisis which economists said is already worsening the current challenges in the country.
In one breadth, the NNPCL's Vice President (Downstream), Dapo Segun, during a press conference in Abuja, attributed the current scarcity across the country, to the impact of recent rains, lightning, and thunderstorms, saying. "We apologise to Nigerians for the fuel queues. Many of the challenges we are facing are outside our control, but we are doing our best to address them.
"For instance, the recent rains have made the Estragos channel difficult to navigate due to siltation, which has significantly hindered our ability to transport petroleum products, especially PMS, across the country," However, he emphasised that the supply tightness observed in Lagos had been addressed, with vessels currently offloading fuel in the city. He pledged that NNPCL would leave no stone unturned in ensuring that petroleum products were distributed nationwide despite the challenges.
Another dimension of the litany of woes in fuel distribution was from the Petroleum Products Retail Outlets Owners Association (PETROAN), which attributed the ongoing scarcity of petrol, to lingering logistics challenges.
PETROAN President, Billy Gillis-Harry, in an interview on national TV last week, said that oil marketers are currently supply-constrained and can only distribute available inventory.
Gillis-Harry explained that the logistics issues are related to ship-to-ship transfers, which hinder the delivery of products to depots and subsequently to retailers.
"I think until we get our supply challenges sorted out efficiently and abundantly, we will not be able to get out of this cycle. I believe you must have heard the NNPC's communications director, who explained that the issues at stake are still logistics-related," Gillis-Harry said.
The spokesperson of NNPC, Olufemi Soneye, on his part, blamed the ongoing petrol scarcity and long queues in filling stations in the country on a hitch in discharge operations of vessels delivering petrol to filling stations.
He said: "The NNPC wishes to state that the tightness in fuel supply and distribution witnessed in some parts of Lagos and the FCT is a result of a hitch in the discharge operations of a couple of vessels.
However, the Independent Petroleum Marketers Association of Nigeria which boasts over 3,000 members and controls a significant share of Nigeria's filling stations has accused the NNPCL of failing to supply adequate products to its members.
The Chairman of IPMAN, Ore Depot, Shina Amoo, claimed that the NNPCL, as the sole importer of petroleum products, has not provided sufficient supplies to IPMAN for the past three years, leading to a dire situation for its members.
"There is no supply anywhere. The available supply is poorly distributed. We have been raising concerns about this for a long time. We previously had an arrangement where we enjoyed a 70/30 supply ratio based on our capacity. Amoo highlighted the bureaucratic delays faced by IPMAN members when dealing with NNPCL, saying, "Previously, after payment, it took a week to load products. Now, the process drags on for three to five months. This has made many of us turn to private depots, even though they charge premium prices."
He expressed frustration over the current distribution pattern, accusing NNPCL of sidelining IPMAN in favour of other groups such as DAPPMAN and MEMAN.
"NNPCL abandoned the distribution pattern and stopped being sincere. They no longer supply IPMAN but prefer to supply others. The volume they provide is insufficient for our needs," Amoo stated.
Fuel Subsidy Still the Issue?
However, market watchers said the failure of the government to fully address the issue of fuel scarcity has vindicated some of the government's critics who raised the allegation of insincerity on the part of the current administration about fuel subsidy removal it announced on May 29, 2023. The argument was that the current administration lacked the ball to see its policy on fuel subsidy removal through and that it was the insincerity that is manifesting in the form of recurrent fuel shortage in the country.
Last week, the NNPCL said it is selling petrol at only half the landing cost. Its Chief Financial Officer (CFO), Umar Ajiya, told NAN in Abuja last Monday that the national oil company is only bearing what he called the "shortfall" and not subsidy.
The official pump price of petrol is about N600/litre but the landing cost is around N1,200 -- and Ajiya confirmed that it cost the NNPCL N7.8 trillion to make up for the "shortfall" in the first seven months of the year.
"What has been happening is that we have been importing PMS, which has been landing at a specific cost price, and the government tells us to sell it at half price.
"So the difference between the landing price and that half price is a shortfall.
"And the deal is between the Federation and NNPCL, to reconcile, sometimes they give us money, so there is no money exchanging hands with any marketer in the name of subsidy."
One of the marketers, who said he was a member of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), was quoted as saying that the problem would not go away any time soon as long as there was still subsidy and the government was not willing to own up and address it once and for all.
He said, "What do you think is the problem? It is the subsidy. The subsidy is heavy in the system but the government keeps denying that. Have you checked the cost of petrol in other countries? No marketer will be willing to buy and sell below the cost price. So only NNPC can import and sell at below its landing cost because it is government; because only NNPC gets dollars at the official rate. No other marketer has that advantage.
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"So, we have said it again and again that subsidy is not sustainable. Because it creates the kind of problem we are seeing. Because it kills competition and investor confidence. It creates corruption and a lack of transparency. The moment you genuinely remove subsidy from petrol, you will not see scarcity again. It will now be based on a willing buyer, and a willing seller."
Analysts said it is a thing of shame that the federal government, whose policy of fuel subsidy removal has pushed Nigerians into misery since 2023 is still in the realm of excuses for the perennial fuel shortage. A Lagos-based energy affairs analyst, who spoke under the condition of anonymity said it is shameful that Nigeria cannot put its house in order. He lamented that rather than finding a lasting solution to the problem of fuel distribution, some agents of the government were bent on humiliating some patriotic Nigerians who had taken the risk to invest in the oil sector.
"The NNPCL is not to blame but the federal government which made it a sole importer of fuel. Instead of devising means of ensuring uninterrupted fuel distribution in the country, officials of the petroleum company appeared to be uncomfortable with the modest contributions of the Dangote Refinery to the nation's development," he alleged.
According to him, these are some of the reasons why Nigerians may wait a bit longer for sanity in the oil industry.
Analysts said the current scarcity and the attendant disruption to commercial activities will continue to haunt the economy for a long time.
