Saturday , 17 March 2018

Inadequate funds, limited importation, panic buying, fuel petrol scarcity

fuel supply
fuel supply
With the adoption of some strategies, especially the increased involvement of oil marketers in fuel importation and distribution, there was a little improvement in the nation’s fuel situation last week. Consequently some stakeholders were optimistic that the prolonged scarcity would soon come to an end.
Take the Nigerian National Petroleum Corporation, NNPC as an example. The Corporation had indicated that the fuel supply and distribution situation has drastically improved in Abuja and its environs as the long fuel queues have virtually eased out following the increase truck out from 186 to 240 trucks last Tuesday.
The NNPC, and its downstream subsidiary Nigerian Products Marketing Company, NPMC, had noted that 12 cargoes laden with Premium Motor Spirit (PMS) otherwise known as petrol were discharging in Lagos, Calabar and Port Harcourt ports in order to wet the nation with robust supply and distribution of petrol.
The Group General Manager, Group Public Affairs Division of the NNPC, Mal. Garba Deen Muhammad had maintained after a tour of some filling stations in Abuja and its environs that the situation was under control. Specifically Muhammad had informed that the NNPC, Major Marketers Association of Nigeria, MOMAN, and the Independent Petroleum Marketing Association of Nigeria, IPMAN, are all trucking out petrol from their various marine and inland depots to stabilize the situation.
He had said the NNPC/NPMC collaborated with the various relevant stakeholders in the hydrocarbon value chain to wet the nation with petrol. The GGM had noted that this was in line with the resolve and mandate of the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu to restore normalcy to the filling stations across the states of the federation.
He had maintained that more trucks were also being sent to Nassarawa, Kaduna and Niger States to reduce the demand in Abuja. Muhammad had informed that at the moment, 12 other vessels laden with PMS were lined up to ensure a seamless flow of petrol to all NNPC inland depots and other strategic reserves across the country.
 “We wish to empathize with motorists across the country over the several hours spent on fuel queues in the past few weeks. We also want to reassure them that we are working tirelessly to ensure that fuel supply and distribution return back to normalcy. As the vessels discharge petrol, we will ensure that the products are trucked out immediately to forestall any form of fuel scarcity going forward,” the NNPC Spokesman had averred.
Muhammad had also enjoined motorists to desist from panic buying and filling station owners to desist from hoarding. He had also cautioned taxi drivers against the unscrupulous act of round tripping to service black market operators saying any driver caught in the act would be handed over to law enforcement agents to face the full wrath of the law, thus raising hope for further improvement in supply nationwide.
But this was not to be. A survey in Lagos, Abuja and other parts of the nation on Monday, this week showed that the situation has worsened again for some reasons. First, investigations showed that many companies who got allocation to import the product for the second quarter of 2016 have not yet been able to do so. A top official in one of the companies who preferred not to be mentioned said it would take between 25 and 37 days to source funds for fuel importation.
“We were lucky to have been shortlisted for fuel importation. But we have not yet started to import the product. It would take some weeks to do a few essential things before the importation can start.
“Once we are able to source funds as well as do other things, we would start to import. For now, we have no other option than to depend on the NNPC for supplies,” he added.
Second, the poor state of some major facilities such depots and pipelines due to vandalism were said to have affected distribution. Third, many consumers, illegal operators were also said to be involved in panic buying of the product.
Expectedly, there were indications that transport fares and prices of food items have risen in many parts of the nation as a result of the current fuel scarcity. For instance, commuters who used buses from Lagos to Uyo, Akwa Ibom State now pay N6, 000 instead of the previous N4, 500. Those travelling from Lagos to Port Harcourt, Rivers State now pay in excess of N5, 000 compared to the former price of N4, 000.
It was not only the long distances that were affected. Commuters within cities and regions also paid more because of the fuel scarcity. For instance, bus operators charge about N500 from Ikeja to CMS in Lagos instead of N250. It also cost commuters N750 to move from Ikorodu to Obalende instead of the previous N400 as a result of the scarcity.
Transport operators who trade blame on the subject confirmed that the price of fuel has risen from N86.50 to N300 per liter in the black market as scarcity worsens in Lagos, Abuja and other cities. Many filling stations did not have any stocks of the product. They maintained that although the Nigerian National Petroleum Corporation, NNPC, the main importer has commercial stocks of fuel; it lacked the capacity to ensure the product get to the filling stations.
The operators maintained that some of the Corporation’s pipelines were vandalised, thus affecting fuel distribution. The transport operators further disclosed that only a few stations have the product to retail to motorists and other users. They confirmed the emergence of long queues in most parts of Lagos and its environs as well as Abuja and other cities.
Illegal operators were noticed hawking fuel in jerry cans along major roads and streets. Investigations in Abuja showed that motorists were subjected to sad experiences while trying to buy the product.   Specifically, 10 litres of fuel went for N2, 500 which is equivalent to N250 per litre as against the government regulated pump price of N86.50 per litre.  A motorist, Mr. Okey Amalu said that he had parked his car for over one week only to discover that it is even more expensive to patronise taxi operators as the scarcity escalates.
“By now we thought that government would have been able to bring this madness under control because the suffering is just too much. I had to park my car since last week with the hope that the situation would improve,” he said.
The situation was more severe in Lagos and its environs where a liter of the product went for as high as over N300. There were no indications that the situation would improve soon, especially as adequate logistics have not been put in place to accomplish steady distribution.
Consequently, the prices of basic goods, especially food have increased tremendously in many parts of the nation.  Consider rice as an example. A market survey showed that a bag of rice now goes for N14, 000 instead of N13, 000.
A food trader who confirmed the development disclosed that other items, including beans have been affected. He said the biggest bag of beans that used to cost about N25, 000 now cost N27, 000. The trader said it cost farmers and traders to more to move the product from the North to southern states, especially Lagos.
It was gathered that many individuals and households now find it difficult to feed as basic food items have been priced beyond their capacities. A source who preferred not to be named said: “The truth is that many families now find it impossible to feed themselves because of the market situation. The hike in fuel price has culminated in high prices of food items, thus making them unaffordable to them.”
“The sad situation is worsened by the inability of many states to pay their workers as when due. In a situation where the workers have not been paid for months, there is no way they will have adequate resources to meet their basic needs, including food,” he added.
This has attracted the comments of some stakeholders. For instance, the Chairman of Major Oil Marketers Association of Nigeria, MOMAN, Mr. Akin Akinfemiwa expressed optimism when he disclosed that the Federal Government has provided sufficient Q2 allocations for the importation of petroleum products.  Akinfemiwa said that the allocations have been evenly divided between the NNPC and the petroleum marketers. According to him, the Federal Government, NNPC and the Major Marketers have put in place a structure to ensure the effective distribution of these allocations to the retail outlets and as a result, PMS has become readily available.
“In order for the populace to reap the benefit of our joint efforts, we advise the public to refrain from panic buying and we assure the buying public that we shall continue to work hand in hand with the NNPC and the Federal Government to ensure uninterrupted fuel supplies all year round.”
The NNPC had noted that it is committed to boosting the nation’s refining capacity which in turn would put an end to perennial fuel scarcity in the country. NNPC Chief Operating Officer {COO} Refineries Mr. Anibo Kragha had made the remark at the opening of the technical bid for the location of new refineries within the existing refineries in the country today in Abuja.
Kragha noted that the open bidding was a demonstration of the determination of the federal government and the NNPC to increase the nation’s refining capacity from 445,000 barrels per day to 650,000. He disclosed that the aim is to leverage on the existing facilities to fast track the take-off of the refineries as soon as possible. According to him, a technical evaluation committee had been set up to study the bids and announce winners as soon as possible.
However, the government has expressed concern, saying it   empathise with the difficulties Nigerians are presently going through due to the current fuel situation.  Kachikwu remarked that: “Our immediate concern is to make petrol available through the interventions and processes put in place so that the queues will disappear within the next one to two weeks. As at 1600hrs of today, one (1)PMS cargo containing 42million litres has completely discharged, two (2) more PMS cargos with a combined ‘Remaining on Board’(ROB) of 44million litres are currently discharging while another PMS cargo containing 44 million litres is berthed and awaiting discharge.
“We have enough products lined up to ensure that the supply gap which created the problem is bridged. In order to ensure effective distribution we are working with Independent Petroleum Marketers Association of Nigeria (IPMAN), oil majors and over 1,000 NNPC staff, nationwide to ensure we overcome the obstacles in the distribution of the products,” he added.
In any case, some stakeholders have made suggestions. For instance, the LCCI has made a strong case for liberalisation of the downstream sector in order to attract the participation of increased investment.
It indicated that there should be a level playing field for all operators, including the NNPC. It disclosed that this would put an end to the perennial problem of fuel scarcity in the country and the hardships suffered by citizens to fuel scarcity.  The chamber noted that this would attract more investment, generate more jobs and reduce the pressure on the country’s foreign reserves.
It further proposed that the “the roles of the DPR and the PPPRA need to be better defined.  The chamber said there are currently several instances of overlapping and duplication of activities and responsibilities.  It noted that this poses a problem for investors in the sector. The chamber disclosed that the refineries should be operated as commercial business entities.  It added that the NLNG model [which allows for private sector management] should be adopted for the refineries in order to expand the nation’s domestic capacity to meet demand.
-          UDEME AKPAN, National Mirror





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