The perennial issue of fuel scarcity seems to have taken a new dimension with the high price of diesel currently; BENJAMIN UMUTEME writes.
Since early February 2022, residents in Lagos have reported more-than-usual road traffics driven by fuel scarcity. The lack of fuel has generated long queues at filling stations across Lagos and other cities including the Federal Capital Territory, Abuja.
According to a report published by the Nigerian Midstream and Downstream Petroleum Regulatory Authority published earlier this month, the supply of fuel depleted after authorities detected methanol levels higher than the national specifications of two to three per cent in recently imported gasoline. 100 million litres of the contaminated fuel were imported and distributed in the last week of January 2022.
Fuel scarcity has caused serious problems for vehicles across the country. Chairman of the Major Oil Marketers Association of Nigeria, Olumide Adeosun, said there are 136 reported cases of damaged vehicle engines as a result of the contaminated fuel. In a news article published by Premium Times in February 2022, an official of the Nigerian National Petroleum Corporation (NNPC), explained that various agencies were working to ensure that the disruption caused by the substandard petrol will be resolved.
The fuel crisis actually started as early as November 2021 when the minister of Finance, Budget, and National Planning, Zainab Ahmed, announced that Nigeria will remove fuel subsidies by 2022 and replace the subsidies with a transportation grant of N5000-a-month to the poorest Nigerians. Since then, fuel retailers, whom NNPC have accused of hoarding fuel, have refused to resume normal operations. This has continued despite the suspension of the subsidy removal plan approved by President Muhammadu Buhari in January 2022.
As of December 2021, the NNPC reported that Nigerians consumed over 19.5 billion litres of petrol annually and an average 1.6 billion litres of petrol monthly. The NNPC also mentioned that they made over N2.5 trillion from the sale of petrol between 2020 and 2021. In October 2021, the Organization of Petroleum Exporting Companies (OPEC) stated that Nigeria exported $27.7 billion worth of petroleum products in 2020. OPEC also highlighted that Nigeria’s petroleum imports were much higher, at around $71.3 billion.
N4.2trn spent in 5 years
With the new disclosure that the federal government spent N4.2 trillion on subsidy payment in five years, many are left wondering why there are still fuel queues.
On Wednesday, the Office of the Accountant General of the Federation revealed the full details of the N4.194 trillion fuel subsidies paid to oil marketers between January 2017 and June 2022.
In a two-page document to the House of Representatives Ad Hoc Committee inaugurated to ‘Ascertain the actual daily consumption of premium motor spirit (PMS) in Nigeria’, the office of the Accountant General of the Federation (oAGF) gave the breakdown to include N126.539 billion paid between January-December 2017 and N691.586 billion paid from January-December 2018.
Others are N537.209 billion paid from January-December 2019; N133.625 billion paid from January-December 2020; N1.159 billion paid from January-December 2021, while N1.545 trillion had been paid between January and June 2022.
This also came a few days after dealer under the aegis of the Independent Petroleum Marketers Association of Nigeria (IPMAN) denied being paid N74 billion by the federal government as bridging claims for the transportation of petroleum products.
In a statement issued Thursday last week, the marketers warned that Nigeria could witness “the mother of all queues” if the federal government failed to pay the 12 months bridging claims being owed operators in the downstream oil sector.
Expert’s view
A political economist and development researcher, Adefolarin Olamilekan, in a chat with this reporter, said it was sad that Nigerians are at the receiving end of the government’s inability to be proactive in tackling the lingering fuel scarcity.
“And we cannot rule out any ills that stakeholders and the government say are responsible for the lingering fuel scarcity. However, one thing that is certain is the gross maladministration taking place in the oil and gas sector. Regrettably, we must accept that the scenario playing today is the negative impact of yester year’s failure of successive governments.
“Consequently, this has exposed the regime as showing little or no concern for the masses because as it stands, many Nigerians are confused if actually the Act is in operation or not. Moreso, the dealings in the country’s oil and gas sector are shrouded in secrecy; a situation whereby facts are hidden from the public. Likewise, account books are prepared in a non-transparent manner. Critically, the situation is a mess that requires strategic decisions to unravel challenges of fuel supply and distribution across the country,” he said.
Vested interests
Olamilekan said further that there were vested interests across all sector of the Nigerian economy. Nevertheless, the vested interests in oil and gas sector are the ones pulling the strings and determining major policy decisions in the sector.
“And this is very dangerous for our polity and economy. And they are well spread from the Multinational oil Companies (MNCs), Indigenous Oil Companies (IOCs), Major Oil Marketers, Independent Marketers, Depot Owners, Oil Workers, Tankers Drivers and Filling Station Outlet Owners. Also, we cannot rule out the role of politicians and political office holders of constituting a part and parcel of the vested interest group in the oil and gas sector.
“Seriously, the individuals and group are beneficiaries of the gaps created by government failure to address the challenges thrown up. Whether is the collapse of the four national refineries, problems of the subsidy scams, failures of private individual converting licences meant for building of refinery to importing PMS, the problem of the price disparity on petroleum product between north and south, problem of crude oil theft and bunkering, problem of industrial action such as casual staff and discriminative labour practices amongst others.
“This vested interest cannot be exonerated from the challenges that bedevil the oil and gas sector in the country. Without mincing words the vested interest are fully making things difficult for the government. And this is also happening because a lots of government official are corrupt and at the same time sabotaging the efforts that is suppose to make the sector more transparent and accountable to the public.”
FG’s efforts
In a bid to ameliorate the suffering of Nigerians, the federal government has not ceased to take actions that would make the product available.
On several occasions, the Nigeria National Petroleum Company Limited (NNPCL), in collaboration with other regulatory agencies, has continued to monitor the situation at times through several interventions and on the spot assessment of the situation at various fuel outlets.
In the interim, NNPCL in collaboration with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) stepped up the supply of Premium Motor Spirit (PMS) to the FCT from 70 to 140 trucks to combat the lingering fuel queues.
The way to go
The expert said in the medium term, the government should maintain the distribution levels. He noted that the government should show leadership in handling the economy, adding that the government should come clean on the claims and counter claims by oil marketers and depot owners.
“Thirdly, the monitoring task forces across the country on petroleum product sales at filling stations should be strengthen and reinforces. Lastly, a media campaign to enlighten Nigerians on the situations as it relates to the scarcity.
“It is very important the NNPC consider local refining of crude, especially setting up by four modular refineries in the Niger Delta so as to bridge the importation of PMS.
“In addition we expect the NNPC LTD to think strategically and began to see the possibility of making sure the four national refinery work. Another is for the government work the talk of stamping out corruption in that sector with appropriate punishment for culprit.”
