How to avoid fuel scarcity during yuletide

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Posted on October 23, 2018

As Nigerians prepare for the December and new year celebrations in about two months time, one dreaded monster that citizens have had to contend with during the yuletide is the challenge of fuel scarcity.
In the last five years, except for 2015, the acute shortage of petrol has been a reoccurring decimal across the country.
The implication of this albatross is increased transport cost, especially for those travelling to other parts of the country, thus leading to an astronomical increase in the price of other goods and services.
On the social aspect, the development eventually mars celebration across the country as most families either cut short of suspend their trips, while those that are not travelling are forced to remain indoors, denying family and friends the fun associated with the Christmas and New year.
Nigerians at this period have often alluded to the fact that fuel scarcity at no other period during the year other than December could have been an act of sabotage on the part of petroleum marketers to either deliberating inflict pain on Nigerians or use the period of festivities to maximize profit.
But, in order to avoid the pitfalls of the past, the Major Oil Marketers Association of Nigeria (MOMAN) had last week, raised the alarm over a N130.7 billion fuel subsidy arrears owed its members by the Federal Government.
The marketers warned that should Government fail to settle the outstanding arrears, there could be a possible distribution in the supply and distribution of petroleum products during the yuletide.
But, beyond subsidy arrears, another factor that could have been responsible for fuel scarcity during the yuletide is the unpreparedness of the Nigerian National Petroleum Corporation (NNPC) during this period.
Statistics have proved that consumption of fuel is almost double during December. Statistics from NNPC claims that the country consumes about 50 million litres of petrol daily.
Why fuel scarcity
Lack of sufficient reserve, low clearance speed of petrol at the ports, diversion of products are some of the reasons for fuel crisis being experienced in the country, says Minister of State for Petroleum Resources, Ibe Kachikwu.
Kachikwu, alluded to the above reasons while speaking before a meeting of the joint committee of the Senate and House of Representatives last January. The meeting was convened to find a lasting solution to the fuel crisis.
“The causes were; first, diversion was very key, second, there were logistics issues,” he said. “Once those diversions began Apapa Wharf was a problem to be able to move things due to bad roads, lack of sufficient reserve in our system making us unable to respond to the supply gap arising largely from the fact that private sector pulled out from supply.
There has been a loose enforcement on diversion in the country. We have not been able to police our depots adequately.”
Regrettably, the situation may be compounded this year as the NNPC currently remains the sole importer of petroleum products, a situation MOMAN has described as being unsustainable.
For its part, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), had during last December fuel scarcity claimed that, there was scarcity because marketers want petrol price to be increased.
‘‘They have been arguing that the margin is not profitable and therefore seek increment which the government has been resisting and pegging at N145 per litre.”
“The leadership controversy in IPMAN also contributes to scarcity. Hoarding by fuel station owners and panic buying by Nigerians are equally the huge reason for the scarcity,” it said.
PENGASSAN equally blamed the challenge on fuel allocation rivalry among Independent Petroleum Marketers Association of Nigeria (IPMAN), MOMAN and Depot and Petroleum Products Marketers Association (DAPPMA).
But, the Christian Association of Nigeria (CAN) insisted that fuel scarcity during Christmas was purely an act of sabotage.
The Christian Association of Nigeria has expressed worry over the resurfacing of long queues at filling stations across the country during the Christmas holiday.
The Director, Legal and Public Affairs, CAN, Evang. Kwamkur Samuel, had in a statement last December urged President Muhammadu Buhari to restore normalcy immediately.
“CAN is worried about the resurfacing of long queues at filling stations in Nigeria, after several increases in fuel price to ensure the availability of the product to all citizens.
“We are not only concerned that this seeming artificial scarcity happens mostly during Christmas period. We are also disturbed that everything is looking like an attempt to deliberately sabotage the celebration of Christmas by some people.
We wonder why queues would suddenly resurface after all assurances and steps have been taken towards constant availability of petroleum product,’’.
But, MOMAN had last week, appealed to the Federal Government to come to its aid by settling in full, the N130.7 billion subsidy arrears owed its members.
Addressing the media, Chairman of MOMAN, Mr. Andrew Gbodume, said the debt profile was taken a negative toll on the day-to day operations of members companies.
He explained that the National Assembly had in the first week of July this year, approved payment for oil marketers, worrying that, three months after oil marketers were yet to be paid.
The MOMAN boss noted that, though the process of getting final approval from government coffers could be cumbersome, he never the less, pleaded with all relevant government agencies to fast track the release of funds.
Gbodume, said the association was doing all it can to ensure that the debt was liquidated before the yuletide, saying past experiences may have informed its decision to take proactive steps aimed at bringing about a lasting solution.
According to him, one of the major challenges the Nigerian downstream petroleum sector is still facing is the non-payment of the long standing fuel subsidy to oil marketers.
Price review
MOMAN advised that the pricing template for petrol should be reviewed regularly to ensure that the price of the commodity reflects the reality on the ground.
The suggestion of MOMAN may not be unconnected with the current landing cost of petrol being imported into the country rising to at least N205 per litre on the back of the recent increase in global oil prices, thus putting more pressure on NNPC.
“We feel the time is now to encourage a well-informed and honest debate among ourselves as Nigerians on our downstream pricing policy, showing sensitivity to the fears of Nigerians and the challenges we face as a people and as an economy to arrive at an equitable but sustainable business model,” Gbodume said.
Corroborating the position of MOMAN, Kachikwu had said that, disparity in the landing cost has prevented the private marketers from importing petroleum into the country.
“Going forward we need to address the issue of pricing, there is a disparity between landing cost and cost we are selling.
If we are going to sell at N145, we need to put some mechanisms in place so that the private sector will go back to importation.
We have a committee looking at this and we are still going to submit a report for review.
He said the executive is currently working on modalities to permanently resolve the petrol crisis and prevent it from rearing its head any other time.
“We need to make marketers responsible for every tank of fuel up until point the point of delivery.
One mechanism will be to look at working with CBN to have an exchange rate mechanism that enables them to stay at N245 price.
If we do that, then they (marketers) can import without price differentials.
In moments of normalcy, we are fine. In moments of emergency, our system is slow to respond. We also need to address our refineries.”
On the other hand, diversion through the nation’s porous borders, scaling up the level of petroleum product reserves to respond to emergencies while the Department of Petroleum Resources (DPR) should live up to its responsibilities of policing the industry as the regulator it should be

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