BREAKING NEWS, Featured, Oil & Gas
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Ibe Kachikwu, minister of state for petroleum resources and group managing director of the Nigerian National Petroleum Corporation, is under pressure as long queues for petroleum products across the country continues while the black market for same continues to thrive
| By Olu Ojewale | Apr 11, 2016 @ 01:00 GMT |
NIGERIANS are currently going through horrendous times caused by fuel scarcity across the country. In the past few weeks, long queues at filling stations have remained constant, causing traffic jams and inconveniences to motorists who stay long hours to refill their vehicles.
As expected, the price of fuel has skyrocketed to more than double at some filling stations who cashing in on the situation to do brisk business. It has also affected the prices of goods and services as commuters on commercial vehicles pay higher fares. Various filling stations now sell between N120 and N150 per litre as against N86 at the NNPC stations and N86.50 at other filling stations.
Besides the scarcity, Kachikwu had also caused anxiety and despondency among Nigerians, when he was quoted as saying he had no magic wand to make long queues at the filling stations to disappear before May this year. This elicited a barrage of reactions from prominent Nigerians with some people either supporting or against the minister. Civil society organisations and some members of the ruling All Progressives Congress, APC, called his competence into question and asked him to resign. Amid all this, one resonant voice that, perhaps, called attention to a possible crack in the ruling All Progressives Congress, APC, was the criticism of the minister by Bola Ahmed Tinubu, former governor of Lagos State.
Tinubu had stated that Kachikwu was responsible for the fuel crisis and expressed his dissatisfaction with the minister’s comments, describing it as insensitive and insulting to the sensibilities of Nigerians. The APC national leader in statement titled ‘Kachikwu Needs to Know That Respect and Good Performance Will Do What Magic Cannot,’ on Saturday, March 26, said the minister must have made the remark “in a moment of unguarded frustration or was an awkward attempt at a joke.” He said whatever be the motive, it was untimely and off-putting, adding: “The remark did not sit well with the Nigerian people; they were as right to feel insulted as the minister was wrong to have said such a thing. The fuel shortage is severely biting for the average person. They are forced to remain in lines far too long — for too much time — to pay too much money for too little fuel. This is no joking matter. Livelihoods and people’s welfare are at stake.
Agreeing, Olusegun Osinkolu, a leader of the APC in Ekiti State, praised Tinubu for his statement, saying it was in the best interest of Nigerians and the APC-led government.
Similarly, Balarabe Musa, former governor of old Kaduna State, said: “From my understanding, Tinubu is a leader in the party and by that, he has every right to speak out if he discovered anything that may likely erode the credibility of the party before the electorate.”
In any case, while some analysts viewed Tinubu’s criticism as having shown a sort of disunity within the APC, Jamiu Afolabi, a member of the APC’s Board of Trustees, BoT, from the South West, said that his remark was a demonstration of open democracy encouraged by the party for the benefit of everyone in the country. Afolabi said: “It shows that we are operating a progressive democratic government where what is important to everybody is that whatever any of the segments of government is doing is beneficial to everybody. It also shows that the APC is not a cult where things are done in secret while the country, like it was under the previous government, was being destroyed.”
Nevertheless, the Presidency, on Sunday, March 27, rose in stout defence of Kachikwu, saying the minister was speaking the truth when he said that Nigerians would have to wait until May for the scarcity to go away.
Femi Adesina, presidential spokesman, on Channels Television programme: “Sunday Politics,” said the minister should not be crucified for telling Nigerians the truth. He pointed out that Nigerians were unhappy with the statement credited to the minister because they wanted him to perform magic which would make the commodity readily available in two weeks. Adesina, however, stressed that the truth which Nigerians should accept was that it would take weeks before the scarcity would go away.
Similarly, Uzoma Nkem-Abonta, chairman of the House of Representatives Committee on Public Petitions, upbraided Tinubu for his criticism of Kachikwu over the handling of the energy crisis in the polity.
Nkem –Abonta, in a newspaper interview, wondered why Tinubu chose to meddle in the affairs of the petroleum minister with a presidential mandate to fix the problem in the sector. The lawmaker called Tinubu not to reduce a sensitive issue relating to the management of the petroleum sector into an APC affair.
Also, Doyin Okupe, former presidential aide, in his facebook post, said Instead of joining his crucifixion, Kachikwu displayed a high level of professionalism and candour since his appointment by President Muhammadu Buhari. Okupe wondered why a distinguished professional like Kachikwu in his exalted international position and pedigree came into the murky arena of the Nigerian oil business, adding that it could only be patriotism. Okupe stated that Nigeria’s policy of setting aside crude for local refining was outdated and counter-productive and should be stopped.
Okupe said:”I thought that it should be obvious to all discerning minds. Our newest refinery is 35 years old. The capacity of the refinery to fractionate crude reduces drastically with age.” He continued:”The reason for this anomaly is not far-fetched. We consume 40million litres of the PMS daily. At about $645/tonne that comes to about 55cents per litre is $22m/day. ”Which importer and which bank in Nigeria of today can open $22m daily? Not even the almighty NNPC! So, that is the real cause of the scarcity. The truth is what the minister said, its not going away soonest.”
Apparently displeased by the restiveness the situation was causing across the country, the Senate summoned Ibe Kachikwu, minister of state for petroleum resources and group managing director of the Nigerian National Petroleum Corporation, NNPC, to appear before it on Tuesday, March 29. There, a contrite Kachikwu said: “I feel that pain everyday when I walk the streets. On Easter day, I was in Lagos monitoring fuel distribution and the depots. I have given 24 hours attention to the problems. I have continued to work with one sole purpose that every problem must have a solution and I think that is the reason I was picked,” he said, adding: “I do apologise for the comment that I made jocularly with my friends in the press about being a magician and it offended Nigerians. It was not meant to be, it was a side jocular issue.” He promised that the fuel crisis will be over by April 7.
He, however, said he would not resign as a minister since he still had a lot of work to do in the petroleum industry, urging those who want to come to Abuja to protest to save their fuel.
The minister enumerated some of the problems facing the oil sector to the Senate. For instance, he said that the refineries in the country could not meet up to 50 percent of the local demand of petrol even if they functioned at optimal capacity. “This is why we have gone to try and increase the capacity,” he said. In order to bridge the gap, the minister said that the country would have to rely on other sources of petrol including private refineries like Dangote Refinery that would soon come on board.
He blamed the non-performance of the refineries on so many factors, adding that the refineries were old and had lacked good maintenance over the years. He said that after most maintenance, the refineries usually worked for very short periods before packing up again. “It got to a point where I started wondering whether as we repair this, somebody was going out there to destroy so that contracting would be done.
“Over the last 10 to 15 years, we have not done a serious, conclusive turn around maintenance of these refineries: the refineries are averagely 30 to 40 years old, the equipment are far dilapidated. “So, even with the best in terms of top level engineers who are there working night and day and trying to make things work, I just said no refinery is working right now.” But he assured that the refineries would not die as they would be repaired to function optimally like other refineries around the world that were even older than the refineries in Nigeria. He called on Nigerians to see it as a point of duty to protect facilities and equipment of government to forestall vandalism, stressing that every Nigerian suffered from the activities of just a few vandals.
But whatever good intentions the minister may have, it is obvious that he has to watch his back.
Earlier, Thursday, March 17, the Nigerian labour unions had asked him to resign and accused him of working for foreigners over a statement credited to him that it was cheaper to import refined petroleum products than refine locally in the country.
Ayuba Wabba, president of the Nigerian Labour Congress, NLC, warned that Nigeria could not develop with the importation of all it needs. Hence, the NLC and the National Union of Textile, Garment and Tailoring Workers of Nigeria, NUTGTWN, at the 11th national delegates conference of the NUTGTWN held in Kano, on March 17, also advised the minister to tender public apology or resign if he failed to do so.
Wabba said that it was obvious that Kachikwu’s comment was not in the best interest of Nigeria. On his part, Issa Aremu, secretary-general of the NUTGTWN, described the minister’s statement as “extremely dangerous.” Aremu said the minister’s statement failed to live up to the mission statement of his ministry “which is to maximise the benefits of the sector, oil and gas, so that we can use these resources for national development.” He said the country spends about $12 billion dollars annually on fuel importation and that if the same amount spent on fuel importation yearly was reserved for the building of local refineries, Nigeria would have many refineries by now.
Contrarily, it was a different picture that was painted in a statement issued by Garba Deen Muhammed, group general manager, Group Public Affairs Division, NNPC, entitled: “NNPC determined to end fuel scarcity,” on Tuesday, March 29. Muhammed said: “The overarching objective (of the NNPC) is to make Nigeria a net exporter of petroleum products as was the case in the 1970’s. Our commitment to ramp up our local refining capacity and availability remains un-waivered with the ongoing rehabilitation works targeted at running all Refineries at a minimum 70 percent capacity utilization within the next six – eight months.”
He said the current scarcity was caused by the problem to the challenge major oil marketers’ face in contributing their supply quota to the constraints in accessing foreign exchange and outstanding subsidy obligations. He stated that the unpaid arrears arising from the subsidy regime had necessitated most oil marketers to stop all forms of involvement in petroleum products imports.
In any case, he said: “We are vigorously pursuing an improved model for ‘crude oil for refined product’ exchange (the direct sale – direct purchase arrangement) which eliminates inefficiencies with an attendant cost saving for the nation of about $1 billion. This will guarantee sustainable product supply to the nation.
“In the medium term, the NNPC is working on sustainable strategies to permanently address the issues and challenges facing the midstream and downstream sectors.”
Apart from that, the minister himself talked about the issue of pipeline vandalism; 90 percent of depots lying in waste because of lack of use and lack of adequate infrastructure as some of the major things fuelling scarcity of fuel in the country.
“Lack of infrastructure too is affecting us because we are moving up to 3, 000 trucks round the country everyday. This is not the best way to circulate or distribute products in a civilised world but that is the only option that we had. NNPC was losing N40bilion every month when we came but this had been reduced to N3billion by December last year. We met a company with a debt profile of N4trillion and with that of the NPDC which is about N1trillion. The access to open up letters of credit continues to be a challenge,” Kachikwu said.
Besides, he blamed some marketers for diverting the petroleum products. He said: “Marketers are diverting the product, some days we load 300 trucks from Lagos coming to Abuja and one third of that, are dissipated into areas where people could make quick returns and so they won’t get to Abuja. We do not have a computerised system that will enable us to track every truck that is loaded from our depots. We are, however, working on this. It has not been there for 20 years.”
However, he stated that the corporation had intensified monitoring to ensure full compliance with approved prices, adding that violations of approved prices and hoarding of petroleum products would attract penalties which include giving out of petroleum products free to the public, sealing off fuel stations found to be hoarding petroleum products and payment of a fine. The corporation vowed to withdraw marketer’s license, stressing that any NNPC, department of petroleum resources, DPR, petroleum products pricing regulatory agency, PPPRA, or government agent found conniving or wanting would be sanctioned accordingly in line with public service guidelines and procedures.
Whatever, Nigerians have all demonstrated and argued that only adequate supply of fuel is acceptable to help reenergise the floundering economy, and not politics.
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