FUEL SCARCITY WITHOUT END

Government should summon the will to deregulate the downstream sector of the petroleum industry

As we have repeatedly said on this page, no sector exemplifies the failure of Nigeria more than the oil and gas industry. Aside having to contend with wasting trillions of naira annually on subsidy payments, a resurgence of fuel queues in major cities across the country has exposed the mess in the sector and there is need to demand accountability. The expectation now is that a full deregulation of the downstream sector (with implication of high fuel price) could guarantee fuel availability and free funds hitherto used in subsidy payment for development. But in the absence of any clarity on that policy decision, the federal government must deal with the current problem. 

For almost three months, the Federal Capital Territory has been hit by an acute petrol scarcity. This has resulted in a long stretch of vehicles at fuel stations, with the attendant traffic snarls slowing down commercial and social activities. But the situation has since degenerated and the problem is now national. While blaming the Pipelines and Product Marketing Company (PPMC) for the current crisis, the Independent Petroleum Marketers Association of Nigeria (IPMAN) said not a litre of PMS has been lifted at the Nigerian National Petroleum Corporation’s (NNPC) satellite depots at Ejigbo since last December. That, the marketers argue, has left them in the hands of private depots who have increased their ex-depot price to a level that makes it unprofitable to sell PMS at N165. But the NNPC insists that the pump price remains. 

As the problem persists, numerous productive hours are being lost while people’s savings are getting depleted. At a period when public universities are closed and many people are out of job, the patience of Nigerians is ebbing fast. Meanwhile, it is unfortunate that in the past six decades, oil has continued to be the hope and the despair of Nigerians. As Nigerians groan daily at filling stations, the stark irony of our predicament is that citizens of one of the largest producers of oil cannot fuel their vehicles. It is as confusing as it is frustrating. Yet, resolving the logjam is not a mystery. After all, countries like Ghana and Niger, who are not in the same category as we are, seldom witness such fuel scarcity.      

 The question that remains unanswered is whether Nigerians would ever see an end to the perennial scarcity that has come to define the management of the downstream sector of the petroleum industry. This should worry the current administration, especially since there seems to be no coherent policy in place to deal with the issue in a holistic and lasting manner. For years, the falling price of crude was the “saving grace”. But the country is now badly exposed at a time of high crude price occasioned by the current war between Ukraine and Russia.    

Meanwhile, the refineries have continued to fail in terms of satisfying the essence of their establishment, given that the importation of petroleum products has become a major and running routine in the economic management of the country. The reason, as often adduced by the industry experts, is that the refineries have either all broken down due to poor maintenance culture or that the installed production capacity cannot meet the ever-growing local demand for petroleum products. Yet, hundreds of billions of naira are pumped into them every year.  

 While it makes no sense that Nigeria continues to import finished petroleum products at huge cost to the economy, experience has also shown that the government is not adept in the efficient management of businesses. If anything, the tales of corruption, ineptitude, sabotage and other sharp practices in the oil and gas industry have continued to confirm this widely held opinion.