Fuel scarcity without end

By The Editorial Board of The Guardian Newspaper

The recurrent spectacle of petrol scarcity in Nigeria in recent times should be seen as an embarrassment that should be dealt with immediately. President Muhammadu Buhari has underscored this national shame with his meeting with all stakeholders a few days ago after which the government acknowledged the scale of the problem.
However, lamentations are not enough. In addition to the new mandates for more imports, the Buhari government should set to work immediately on a long-term scheme that will not only end scarcity but ensure the refining of enough petroleum products for Nigerians’ consumption.

As usual, the recurrent challenge that is apparently disruptive to the economy is attributed to the controversial billions of Naira in subsidy being paid to some importers and oil marketers. The issue has often generated heat and altercations and some of the marketers are still in court over charges of economic crimes against the state.

Of course, there is too much opaqueness in the operations of the oil sector as the national oil company, the Nigerian National Petroleum Corporation (NNPC) has not been seen to be fully committed to service delivery in the sector. Sundry middle-men and fly-by-night contractors have taken advantage of the murky business style of NNPC to fleece the nation of tonnes of money. The result is that Nigeria is perhaps the only oil producing nation that imports refined products for local consumption.

Whenever the pains of scarcity begin, there are usual speculations about likely causes, claims and counter-claims by operators and regulators. But one fact is constant that scarcity is not often due to product availability but the general increase in the over-all cost of importing the product, which usually affects marketers who are always without the required capital amid complaints of unsettled previous loans from the banks. Besides, there have been excuses that the new foreign exchange (Forex) policy has hampered marketers’ ability to raise funds for importation of products as they struggle to secure outstanding subsidy claims from the Federal Government.

Even as NNPC has assured consumers it is doing everything possible to make petroleum products available soon, it has been reported that the current scarcity might not be unconnected with the corporation’s alleged delay in signing an oil swap agreement, the previous agreement on this having raised transparency and ethical issues currently being probed too.

Curiously, there is no more debate about deregulation, which used to dominate discussions on the industry as NNPC has opted for what it calls “the more efficient Direct Sale-Direct Purchase (DSDP) alternative”. This allows for direct sale of crude oil by the NNPC and direct purchase of petroleum products “from credible international refineries.”

The NNPC says it has opted for the new deal after “evaluation of pre-qualified bidders revealed that most of the 44 companies earlier shortlisted for the next stage of the tender process only had affiliations to refineries abroad, a situation, which introduces oil toll on the value chains.” In this connection, the NNPC got approval to import 75 per cent of the country’s petrol needs while all the other major and independent marketers got the remaining 25 per cent import permit.

Meanwhile, the importers are crying out that the Central Bank’s new foreign exchange policy has worsened matters as they find it pretty difficult to import the 25 per cent allocated to them. The marketers and indeed other stakeholders are wary of the new monopoly while Nigerian fuel consumers are enduring untold hardship. There is, therefore, a sense in which Nigerians can look in the direction of the NNPC for explanation or better response to the current persistent energy crisis.

What is more, electricity distributors have also fingered scarcity of gas to their installations as part of the near total darkness being experienced all over the country. So, the demand for petroleum products has been pushed a lot higher as a result of the need to power private fuel generators, thus compounding the harrowing agony of the people.

This, however, is the time for pertinent questions to be asked of the Nigerian authorities. What has happened to the refineries the NNPC officials claimed recently had been turned around to complement import? What is the government doing about the bill for the overhaul of the nation’s oil industry, in the federal legislature, the Petroleum Industry Bill?

Certainly, enough excuses have been offered for the fuel scarcity in the country and enough damage has been done to the people’s well-being. This is a national shame that should be ended immediately by the present administration.