Fuel scarcity and matters arising

WHEN should Nigerians expect end of the lingering fuel crisis and full availability of petroleum products? This was the question that almost landed the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, into deep soup.

Addressing the Senate Committee on Petroleum, on Tuesday 29th March 2016, the Minister had insisted that the scarce commodity would be readily available across the country by the second week of April. But he also declared that he was told on what to say when he appeared before the Senate committee, saying what he was reeling out to the committee was what he was asked to say from the coaching, although he did not disclose those who coached him.

In the first instance, the question was not only as naive as it was foolish, it was at best insincere and at worst deceitful. And as was rightly said by the minister after being thoroughly “coached”, there are two renditions – political and technical answers to the issue of the dateline to end the lingering fuel scarcity in the country.

In the words of the Minister, “First is the political answer, which says we are doing our very best to go away from this situation but the training in me never attempts to be very exact because I set a goal post. All I can say as an amendment to that is that in the month of April, within the first two weeks of April, we would have this issue completely resolved and you will not have this problem anymore.

“I am working very hard to make it the first week in April, it’s not going to happen in March and all am doing right now is logistics arrangements to try and cushion the pains as much as I can and Nigerians can help me by not double buying. “But, once we begin to get into the 5th, 6th of April, you will see a dramatic change in all this. And here the political answer ended.

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“Sometimes it is difficult to change your skin at an old age. So I tend to tell the truth the way it is even if I get into trouble in the cause of doing them. But the reality, distinguished senators, is that we are doing everything humanly possible, nothing is out of the table, no solution is thrown into the trash bin and we have got to a point where we can confidently say we are bound to see the last days of some of these occurrences in our history.”

Now answering the question from the technical point of view, the Senators were bluntly informed that “resuscitation of refineries is the only solution to scarcity” as said by Kachikwu, “though the scarcity of the commodity may end by April, Nigerians may have to wait till May for major revolution in the availability of the fuel.”

If as explained by the oil minister that the current petrol scarcity was caused by the refusal of the major oil marketers to import products; diversion of the products by marketers to unauthourised locations because of non-computerisation of the distribution network to monitor trucks; and pipeline vandalism; is it not clear what the problem is?

This lingering fuel crisis borders solely on availability of the commodity- fuel products! Both issues of diversion and vandalism are consequences of non-availability. If there were enough products for our domestic use, diversion of loaded trucks from Lagos to Ogun or Oyo or from Port Harcourt to Aba or Uyo would not create the hard-biting nation-wide scarcity we are currently facing.

The way to address this problem is to honestly and sincerely look at the issues in the matter without bias. If major marketers are refusing to import products, we need to find out why it is so. This is because whether anybody wants to hear this or not, the Nigerian National Petroleum Corporation (NNPC) cannot on its own travel the road of providing all our domestic fuel needs especially now that our refineries are not even contributing up to 20 percent of our daily domestic consumption despite what the NNPC and the government people would want us believe concerning the star performance of the three refineries.

It would be recalled that when this government took over power in May last year, this country had arrears of unpaid subsidy claims that were in excess of N600 billion. How the debt was incurred is immaterial as records showed the money was still outstanding.

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The calculation was that if the subsidy regime continues, the marketers being owed would get paid ultimately. So, some of them continued to import, but disposition changed when the federal government ultimately announced complete cancellation of any form of subsidy payments. By then, most of the companies didn’t have the liquidity even to go to the banks and open letters of credit, and that became a major issue.

What that meant was that by late August last year, we moved from the expected obligation of the NNPC to bring in 50 per cent of the national consumption of about 45 to 50 million litres per day but we now have to cover a 100 per cent platform because nobody was bringing in the product, the consumption was still static and we needed to cover the gap.

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The NNPC as it said took up that challenge without increase in crude allocation, without any excess allocation as it were and we had to work exceedingly hard from August last year to cover the gap but could not cover it 100 per cent because the corporation didn’t have the ability to do so. So, the gap the NNPC could not cover was responsible for the queues. That was responsible for the over 80 per cent of the problem.

And as said by the minister, because the importers are not bringing in the product, the logistics of the NNPC had been expanded, creating great nightmare for us. Not only do we bring in the product but we also lighten it and take it to the storage tanks of the majors and some cases if you notice, we also are taking intervention trucks and taken products into the stations of this individuals because if they do not sell and the stations are empty, it is a challenge. NNPC basically over extended itself in terms of what it was set up to do and what it has the capacity to do. This is the truth!

The NNPC figure had it that Nigeria consumes about 45 million litres of petrol everyday and according to the corporation, that covers the 60 per cent that the crude allocation arrangement can deal with. That means there is still that 40 per cent gap which importers had got to bring in.

These are some of the issues government should look at with a view to installing lasting solution to this embarrassing fuel scarcity problem.