The embarrassment called petrol scarcity


Nigerians woke up over a week ago to see symptoms of probable fuel scarcity. Within days the fears became a reality and so did petrol dry up from across the country. As usual, hoarding took centre stage. To add fervor to the scarcity, long queues returned to our roads, fighting at petrol stations and hike in pump price immediately became effective. Before long, it became a crippling experience. Unfortunately, fuel shortage may not end anytime soon in spite of   government’s assurances of a quick return to normalcy at the country’s filling stations.
Since long queues returned at the stations last week, the Federal Government, Nigerian National Petroleum Corporation (NNPC), Independent Petroleum Marketers Association of Nigeria (IPMAN) and the oil and gas workers’ unions, have given different opinions on the cause of the scarcity which came just a few weeks to the Christmas and New Year festivities. The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, at a press briefing in Abuja last week, blamed the scarcity on what he called a “gap in the supply of petroleum products.” This, he said, arose from the fact that “NNPC is the only one importing petroleum products at present.”
Speaking further, he highlighted the fact that  most of the private sector participants who are expected to bring in petroleum products were not able to do so, but had pushed the supply to January, thereby leaving NNPC with the burden of filling the supply gap. However, characteristically, the Group Managing Director of NNPC, Dr. Maikanti Baru, attributed  the crisis in product supply to “panic buying.” He also insisted that the corporation had enough product stock for consumers across the country. In fact, he and the Minister of Information said NNPC has inventory that can last till end of January.
The IPMAN, on the other hand, blamed the scarcity on the inability of the NNPC to pump enough of the products at strategic depots across the country, especially at the Ejigbo satellite depot in Lagos. It also alleged that its members were compelled to buy the product at N141 per litre, instead of the ex-depot price of N131.38 per litre.
The association had earlier threatened to withdraw its services on Monday, December 11, accusing NNPC of breaching the bulk purchase agreement with it on the ex-depot price. NNPC has denied the allegation.  Its the season of blame game. While the blame game lasts, different sectors of the economy are groaning under the weight of the scarcity. Businesses and households are lamenting, as the shortage is crippling small and medium enterprises which depend on fuel to run their operations. Transport fares have also increased. The fear is that if the shortage does not end soon, it may linger till Christmas and the new year, and inflict untold hardship on the people. Meanwhile, the fuel black market is booming as hawkers of the product are having a field day in many parts of the country. This will inevitably drive up inflation. For a country that is exiting recession, this is not good.
It’s evident that from the explanations given by various stakeholders on the reason for the scarcity, there must be some truth in-between. Nevertheless, NNPC has not managed this fuel crisis properly. The corporation should show itself capable of ensuring adequate supply of petroleum products at the right price. It is cruel and insensitive to subject the nation to a shortage of fuel at this time of the year that the country witnesses a massive movement of people, goods and services.
All parties involved in the fuel supply chain should speedily bring this scarcity to an end. Fuel should be readily available and affordable. Government will also do well to review the fuel price template which some stakeholders in the oil and gas sector have alleged is causing confusion in the oil market.
The current fuel shortage appears to validate the concern of labour unions that the price modulation regime which came into force a few years ago will not work in an imports-dependent country like Nigeria.
In spite of the assurances by regulators and government agencies such as the NNPC and PPPRA that there is no plan to increase fuel price, it is not enough. Care must be taken to ensure no price increment anytime soon. All the factors driving the current scarcity should be addressed as quickly as possible. It must be noted however, that there are some improvements in a couple of cities around Nigeria.

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