WHAT started as an isolated problem in some states of the federation last week has now become a national embarrassment as motorists now literally sleep at filling stations losing precious man hours before they can source products to power their vehicles.
No thanks to the current fuel scarcity which has forced prices of the commodity to go up in Nigeria at a time consumers of petroleum products across the globe are savouring the benefits of a drop in the price of crude oil in the international market which has fallen to an all time low price of 55 dollars per barrel.
In major towns and cities across the country, motorists stay in the seeming unending queues of vehicles at the few filling stations that have the products to sell
This development has piled pressure on the entrepreneur who seizes the opportunity to maximize profit through inflation of pump prices which has now gone up to between N100 to N150 as against the regulated price of N87 per litre of petrol.
The present scarcity and the endless queues have forced many to resort to patronizing the thriving black markets where the prices go for as much as N200 per litre with the buyer unsure of the product quality with grave consequences for the functionality of the recipient vehicles.
From Abuja the Federal Capital City through Ilorin, to Lagos, the commercial nerve centre of Nigeria and Enugu as well as Benin City, the story is the same.
The present petroleum crisis besides having serious negative effects on the nation’s economy has caused serious social and safety problems. Prospective product seekers bickered among themselves with some of the scuffles resulting in physical assaults. Not a few persons stock pile fuel in their houses thereby compromising the safety and security of their lives and property as well as those of their community.
The present scarcity coming in the midst of preparations for the March 2015 election has left the ruling Peoples Democratic Party (PDP) accusing the All Progressive Congress (APC) of sabotaging the distribution chain of the petroleum product. As deluding as the claim by the National Chairman of the PDP Alhaji Adamu Muazu was, it was quickly refuted by the government in its self admission that the fuel crisis was caused by the Petroleum Product Pricing and Regulating Agency (PPPRA) failure to settle outstanding differentials in the subsidy claims and excess cost incurred by oil marketers occasioned by the devaluation of the naira.
The Director of the agency Alhaji Farouk Ahmed who disclosed this when it appeared before the senate committee on downstream, said the agency was at a loss in deciding which of the exchange rates to use in calculating what was due every importer of fuel into the country owing to the double devaluation of the naira by the Central Bank of Nigeria CBN first in November 2014 and in February 2015.
The PPPRA boss was clear in his explanations that the inability of his agency to calculate the differentials in the subsidy payment and extra cost occasioned by the weakening naira against the US dollar hampered the purchasing powers of the importers to bring in more refined petroleum products for distribution to the end users.
This was further clarified by the Minister of Finance and Coordinating Minister for the Economy Ngozi Okonjo-Iweala when she confirmed government readiness to offset the extra cost incurred by the marketers put at N30 billion. Besides, Mrs. Iweala admitted that the FG was also indebted to the oil marketer to the tune of N185 billion which government has also agreed to offset with the issuance of the Sovereign Debt Note by the Debt Management Office DMO
Present development has further tingled the consciousness of Nigerians more than ever before of the consequences of the Nigeria government’s continued dependence on fuel import for local consumption.
Besides the pressure to which the nation’s currency (the naira) is subjected in the face of inordinate and excessive demands for foreign exchange by Nigerians to solve their socio-economic problems, the quantum of jobs lost to this import dependent economic system in unimaginable.
The federal government of Nigeria in its make belief approach to solving our economic woes had embarked on a campaign for citizens to shun foreign goods and go for their local substitutes.
It is on record that this federal government of Nigeria does not believe in leadership by example. Otherwise, it should have first and foremost ensured that the country remain self sufficient in crude oil refining and stop this suicidal dis-economics of sale of crude oil to purchase in return, refined petroleum products.
The federal government had since the return to civil rule to Nigeria in 2009 made futile efforts to boost local refining of petroleum products with some Turn Around Maintenance done on existing four refineries in Eleme, Port Harcourt, Warri and Kaduna.
Even though these steps did not make any significant impact on the installed capacities of the refineries due to official corruption and acts of sabotage by interested parties, the Obasanjo administration decided to give licenses to private individuals to build their own refineries with the intent to boosting local production.
But none of the twelve licensees except Orient Refinery owned by erstwhile Secretary General of the Common Wealth Emeka Anyakwu did anything with the licenses obtained thereby leaving the products supply chain worse off with consumers paying higher for the products.
This is quite evident in the fact that Nigerian fuel Consumers still procure the products at exorbitant amount of money despite the current rock bottom price of crude oil in the international market.
At the moment, a barrel of crude oil hovers between 54 to 56 dollars as against the former price of between 100 and 110 dollars per barrel. The simple explanation to why we still pay higher for the product we have in abundance in Nigeria is that we do not refine them locally. This is perhaps the reason why the poor kerosene consumers in the country do not get the product at the approved price of N50 per litre without any concerted efforts to addressing the problem except for the occasional but self deluding direct sale of the product to a handful of consumers in some selected locations under funny acronyms such as Kero Direct and Kero Correct
The most embarrassing aspect of the whole milieu is the NNPC constant daily collection of 450,000 barrels of crude oil expected to be locally refined out of which the four refineries only process 60,000 barrels per day.
According to Dr, Tim Okon, Coordinator, Corporate Planning and Strategy of the NNPC, of the total barrels of crude received 210,000 is swapped for refined products while the balance of 176,000 barrels is sold at the international crude oil market. He however hinted that proceeds from such sales are paid to the Federation Account.
Policy summersault has been at the heart of the nation’s inability to refine petrol to meet its domestic demands. Recall that at the inception of the Jonathan administration in 2011, the NNPC said it was going to build four new refineries two of which would be sited in Lagos and Kogi States.
Several years down the line, nothing has been said about the scope and dimension of the intended refineries, if anything the files containing the memos currently gather dust at the Petroleum Ministry’s office in Abuja. What we hear these days is that the four existing refineries have been penned for a comprehensive Turn Around Maintenance (TAM)
It is important to note that Nigerians were hopeful that the country would achieve self sufficiency in refined petroleum products when the four proposed additional refining companies become operational. That hope was almost immediately dashed when the industry spin doctors said the nation required an enabling law to un-bundle the NNPC and make the petroleum industry competitive in terms of product pricing.
The introduction of the Petroleum Industry Bill became identified as the ombudsman that would bring to an end the pains of consumers of petroleum products in Nigeria. Unfortunately, the PIB has since the last administration been at both chambers of the National Assembly with slim chances of being passed into law before the dissolution of the present parliament.