Ending A Persistent Nightmare

Nigerians want President Goodluck Jonathan to find an immediate and lasting solution to lingering fuel scarcity in the country

|  By Anayo Ezugwu  |  Dec. 2, 2012 @ 12:11 GMT

HOW long is this fuel scarcity going to last? This has been the question many Nigerians are asking over the fuel scarcity which has persisted for several weeks. The scarcity became noticeable first in the Federal Capital Territory when petrol stations ran short of petrol, diesel and kerosene. It later spread to Lagos and other major cities in the country before it now become a nationwide. This situation has added more burdens to Nigerian motorists and commuters who now pay more for fuel and transportation respectively.

As the scarcity lingers, officials of the Nigerian National Petroleum Corporation, NNPC blame it on vandalisation of pipelines in some parts of the country. The NNPC also blamed the situation on delays in offloading cargoes at the ports and repair of facilities at the Atlas Cove Jetty in Lagos, the loading point for fuel cargoes.

Its latest scapegoat is the damaged portion of its pipeline at Arepo village, Ogun State. The corporation’s spokesman said in a media briefing that the damage of the pipeline by vandals meant that over 10 to 11 million litres of petrol flowing through it per day to Lagos and its environs had been disrupted. As a matter of fact, the vandalism had resulted in an inferno that had raged for several days. A team sent to repair the fault was ambushed by vandals who also killed three NNPC engineers, the spokesman said.

But the Independent Petroleum Marketers Association of Nigeria has revealed that the fuel subsidy refund debate of who owes who and the refusal of the marketers to import petroleum products, leaving only the NNPC to import them are the major causes of the scarcity. According to the association, government, through the Petroleum Products Pricing Regulatory Agency, owes marketers billions of Naira in unpaid petroleum subsidy refunds. IPAN has warned Nigerians to brace up for a prolonged scarcity as stocks would soon be exhausted and the impact of the import boycott would become manifest. The calculation, as alleged by the Nigeria Labour Congress, is that the public will agree to more billions of Naira spent on subsidy payment when confronted with the pains of a prolonged product scarcity.

That is already happening as the scarcity is showing no sign of abating. Apart from long queues, many stations in major cities in the country, like Lagos, Abuja, Port Harcourt, Ibadan, Kano, Kaduna, Makurdi and Enugu are dispensing fuel at prices ranging from N115 to N200 per litre compared to the regulated price of N97. Worse, some station managers and attendants charge extra fees between N100 and N200 for buying with a gallon.

Fuel scarcity
Fuel scarcity

As it stands now, the predicament is as predictable as it is avoidable. An oil-producing nation that depends on a corruption-driven import model for its refined products supply is bound to suffer shortages. Experts said the preference of Nigeria for importation of refined products is traceable to a flawed industry structure, corruption and weak governance. The government unwisely continues to pursue a policy of importing petroleum products even when its 2.7 million barrels per day crude oil production capacity makes it the world’s sixth largest producer. It is sad that a government that has anchored its 2013 budget on assumed oil production of 2.53 million barrel per day, and went on to set aside N971 billion to subsidise refined petroleum products import in the same budget, more than double of its N426.53 billion vote for education.

Yet, in the midst of all these, Diezani Alison-Madueke, petroleum minister, is planning to waste another $1.6 billion of public funds on the state-owned refineries that have already gulped billions of dollars on fraudulent turnaround maintenance contracts for over three decades but still remain perpetually comatose.

It is depressing that the world’s sixth largest oil producing country, in terms of reserves and daily production relies almost on importation of refined petroleum products for its domestic needs. Financial experts insists that there is no alternative to local refining as the economy cannot sustain the import of 41 million litres of petrol daily.

President Goodluck Jonathan in his latest presidential media chat, indicated his helplessness in the fight against corruption which is destabilising the downstream sector. The President and his cabinet should halt the corruption and privatise the four state-owned refineries in the country because the Nigerian state does not have the discipline to run them efficiently. All other downstream assets of the NNPC such as the depots, pipelines and marketing outlets should be similarly transparently privatised.  More concrete actions beyond the recent zero duty on imported refinery materials, especially a relaxation of the regulatory framework, should be offered to investors to build private refineries.

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