Oil & Gas
For about a week, Nigerians across the country experienced fuel shortage which caused long queues at filling stations, but just as promised by Ngozi Okonjo-Iweala, coordinating minister of economy, the situation appears to be getting better as the week progresses
| By Anayo Ezugwu | Feb. 23, 2015 @ 01:00 GMT |
THE federal government appears to be making good its promise to resolve the fuel scarcity which hit the country about a week ago. By Friday, March 6, there were fewer vehicles in the queue struggling to buy fuel unlike before. It was just as Ngozi Okonjo-Iewala, coordinating minister for the Economy and minister of finance, had promised that the scarcity would be over by the weekend. While briefing journalists in Abuja on Wednesday, March 4, after a meeting with the Central Bank of Nigeria, the Petroleum Product Pricing Regulatory Agency, PPPRA, oil marketers and depot owners, the minister said the federal government had addressed all contentious issues with the marketers, including the issue of foreign exchange rate differentials, promising the fuel shortage would ease off latest by Saturday, March 7.
According to her the federal government, has accepted to pay the N30 billion exchange rate differentials owed the marketers over the last couple of months and was on the verge defraying the N185 billion debt owed them with the issuance of Sovereign Debt Notes, SDNs.
Okonjo-Iweala, who reaffirmed that the federal government had been dialoguing with the marketers within the past 10 days, enjoined the marketers to be patriotic in their dealings with the government as the issue affects everyone, and commended Nigerians for their patience.
Indeed, the PPPRA on March 2, blamed devaluation of naira by the CBN as the major cause of the scarcity. Farouk Ahmed, executive secretary, PPPRA, said that the fuel scarcity was caused by the inability of petroleum marketers to get letters of credit from commercial banks to enable them import fuel. “The recent events have to do with delay in the arrival of cargoes. Non-arrival of cargoes made it difficult for premium motor spirit, PMS, to be delivered. What actually complicated it was the devaluation of naira twice. The first one that took place on November 28, 2014 when Naira was devalued from N155 to N168 to $1. The second one that took place on February 18 brought the exchange rate to N199 to $1. These two developments brought a lot of confusion into the oil sector. Marketers were not sure of the actual delivery cost. We had to draw a new template as advised by the CBN. The delay we have now is caused by the November devaluation. But the reality is that the policy is clear now,” he said.
Ahmed, however, assured Nigerians that the federal government was taking steps to remedy the situation and promised that the agency would come down hard on petroleum marketers who increased the price of fuel above N87 per litre. “The minister of finance, PPPRA and other agencies are working closely to ensure that outstanding bills are paid. And that one had been done now. On Monday, March 2, we got an approval from the Budget Office for payment of all outstanding bills. We have adjusted the template now. We have to put the exchange rate at the interbank rate. Now, we have a direction,” he said.
But while those efforts were being made, many filling stations in Lagos State were busy exploiting the situation to their own advantage. Some of the major filling stations that had the product were selling it above the approved price of N87, and at minimum of N100 per litre. The scarcity also created business for black-marketers who were selling at roadsides at N200 per litre. It was a boom business for street urchins who established black market outlets in areas worst hit by the scarcity made brisk business as vehicle owners and residents who were unable to wait in the long queues preferred to buy from them at skyrocketed prices.
Realnews reporter who visited some filling stations such as Oando and MRS along Ogunlisi Road, Ojodu, on Monday, March 3, reported that they were besieged by hundreds of private and commercial vehicle owners as well as those who wanted to buy in jerry cans for their generators. The situation worsened towards evening when attendants could not control the nuisance caused by commercial vehicle operators who formed parallel lines causing a heavy build-up of traffic along the road. By Tuesday, March 3, there were similar reports from different parts of the country, from Ibadan in Oyo State, to Port Harcourt in Rivers State and even in Abuja, federal capital territory, where access to fuel supply had become a big hurdle.
For instance, at Obafemi Awolowo Way, Ikeja, Lagos, black market traders were everywhere with fuel in jerry cans which they sold far above the pump price while most filling stations claimed they had run out of stock. The situation further affirmed the position held by some major petroleum marketers that the situation might remain chaotic in the next three weeks until new consignments arrived in the country.
But the Nigerian National Petroleum Corporation, NNPC, assured the country that the situation was under control and promised to improve fuel supply to the system. The corporation said it was injecting about 688 million of PMS into the market. Ohi Alegbe, spokesman of the NNPC, said that the corporation was working tirelessly to ensure that the situation was addressed quickly. “We had stated that we will wet the market with 688 million litres of petrol. Distribution of products is by trucking. You will agree that it is some distance from the depots and tank farms in the south to the depots and retail outlets in the hinterland. Expectedly, the queues should disappear before long,” Alegbe said.
The NNPC spokesman blamed the scarcity on panic buying by motorists and sharp practices by some retail outlets that were hoarding the commodity, thereby frustrating efforts to stem the scarcity. He said the NNPC had informed the Department of Petroleum Resources, DPR, of some sharp practices by unscrupulous petrol stations’ owners for adequate sanctions against them. “Panic buying has persisted in spite of our appeal to motorists. Secondly, some retail outlets are hoarding the product by dispensing from only one pump head. We have reported some of them to the DPR and we believe appropriate sanctions will be meted out to them appropriately,” he said.
Even then, Nigerian politicians still went on to cash in on the situation to trade blames. The ruling Peoples Democratic Party Presidential Campaign Organisation, PDPPCO, attributed the scarcity to sabotage by the opposition All Progressives Congress, APC, which it said, infiltrated the ranks of the fuel marketers. Femi Fani-Kayode, director, media and publicity, PDPPCO, said in a statement in that the marketers had taken a sub-contract from the opposition to frustrate supplies of petrol to fuel stations as part of a grand plan to create tension in the polity.
“We know who the fuel marketers are. We know the relationship that exists between one of the biggest fuel marketers and a national leader of the APC. These unconscionable opposition elements infiltrated the ranks of the fuel marketers, whom they have contracted, in a calculated attempt to frustrate the good efforts of government. Why have they taken this time when all hands are on deck for the March 28 elections to cause this artificial fuel scarcity? The situation is so bad that they are not importing the product. They are even threatening tank farmers not to release any fuel in their depot to sustain the shortage. We are aware that the tank farmers have reported the threat to the police and other security agencies,” Fani-Kayode said.
The APC, in its reaction through Lai Mohammed, national publicity secretary of the party, said it was totally unconscionable, and indeed an admission of failure, for a sitting government and ruling party to blame the opposition for their failings. “These guys have simply abdicated their responsibility to the people. They can as well throw in the towel and head home. The questions to ask are: who runs the NNPC? Who pays subsidy to fuel marketers? Who has used federal resources to bribe individuals and groups to such a level that there is no money to run the government, not to talk of paying subsidies? The moment a ruling party starts transferring its responsibilities to the opposition, it is clear that the market is over,” Mohammed said.
|Tags: CBN Central Bank of Nigeria Department of Petroleum Resources DPR Farouk Ahmed Femi Fani-Kayode Fuel Scarcity Lai Mohammed Ngozi Okonjo-Iweala Nigerian National Petroleum Corporation NNPC Ohi Alegbe PDPPCO Peoples Democratic Party Presidential Campaign Organisation Petroleum Product Pricing Regulatory Agency PPPRA Realnews SDNs Sovereign Debt Notes