‘Why fuel scarcity persists’

By Hendrix Oliomogbe (Asaba), Azimazi Momoh Jimoh, Collins Olayinka (Abuja), Gordi Udeajah (Umuahia) on 04/03/2014

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AS the fuel scarcity continues to cripple economic activities nationwide, the Department of Petroleum Resources (DPR) has attributed the shortfall in supply to non-renewal of contracts of some independent marketers to import the product. 

Meanwhile, the current fuel scarcity in some parts of the country is principally caused by marketers’ subterranean ploy to stampede government into increasing the pump price, The Guardian has gathered. 

But the government is seeking ways of ending the artificial scarcity without bowing to pressure from marketers to increase the pump price. 

In a related development, Trade Union Congress (TUC) has called for an end to the fuel scarcity.

The DPR, which disclosed this yesterday at its budget defence before the Senate Committee on Petroleum (Upstream), also alleged that non-payment of subsidy fund to the marketers by government had hindered the importation of the product, resulting in shortage in supply.

In his presentation to the committee, Director of DPR who was represented by the Zonal Operations Controller, Abuja, Aliyu Halidu, said that marketers were uncomfortable with the current pump price of N97 per litre.

According him, the marketers had complained that the operational cost had seriously eaten into the pump price, making it difficult for them to break even at the current price.

Halidu also noted that the shortage in supply of fuel was equally affected by the increased activities of illegal bunkering in the country.

Consequently, he urged the lawmakers to expedite action on the process of legalising bunkering, in addition to resuscitating other laws which could facilitate elimination of illegal bunkering from the system.

He, however, pointed out that the department had already forwarded a proposal to the office of the National Security Adviser (NSA) in respect of legalisation of bunkering to curtail illegal operations, noting that the NSA assured that the relevant laws would be resuscitated to help tackle all the problems emanating from illicit bunkering activities.

The zonal controller also implored the Senate to fast-track the passage of the Petroleum Industry Bill (PIB) in order to help strengthen the DPR’s regulatory powers for effective operations in the industry.

Commenting on the decline in revenue generation of the Department, Halidu blamed it partly on the failure of the Nigerian National Petroleum Corporation (NNPC) to pay royalties due to DPR.

He explained that rather than pay royalties to DPR, the Corporation was paying it as part of its crude oil sales, lamenting that this had contributed to the recession in the revenue earnings of the establishment.

The Guardian gathered in Abuja yesterday that the marketers are pushing for increment in their profit margins as they claimed the N5.50 accrued to them is no longer enough to settle their overall costs.

The depot price is N91.50 and marketers sell N97 per litre to the public.

A source said that the claim by marketers about late release of allocation for fuel importation for first quarter of this year is not tenable as releasing allocation few days into new quarter has always been the practice.

He said: “The claim by marketers that first quarter allocation came late is farther from the truth. The last quarter allocation for last year (2013) was meant to last till the end of January and the Ministry of Petroleum Resources approved the allocation on February 20, 2014. That is the practice. We must not lose sight of the fact that the need to streamline the import regime is more necessary now than ever because of the discrepancies that greeted import regime in recent past. The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, has shown that all she wanted is a system that prioritises transparency and that informed why all the details were taken into account before the allocation for the first quarter was released. Even at that, the exercise was done within the correct time-frame.”   

The moves by marketers to push for an increment in the pump price of petrol has been seen as a ploy to induce political tension as the nation moves towards the 2015 general elections.

A source at the Presidency told The Guardian that government has directed the NNPC to increase allocation to Lagos and other densely-populated cities with a view to ending the queues. Also, the DPR is stepping up its fuel monitoring duties, including the Petroleum Products Pricing Regulatory Agency (PPPRA).

A statement by the President of TUC, Bobboi Kaigama and General Secretary, Musa Lawal, said: “The familiar trend of periodic scarcity of fuel is simply unacceptable. Nigeria remains about the sixth largest oil producing country in the world and ‘giant of Africa,’ and one ordinarily expects this to translate to great fortune and comfort for the average Nigerian.     Unfortunately, this has not been the case as majority of the masses have remained impoverished in the midst of plenty.   More depressing are reports that the scarcity is artificially created by the same cabal that has vowed not to see our ailing refineries work let alone new ones built.” 

Many Lagos residents were forced to stay out of work yesterday due to the fuel scarcity which has almost crippled commercial activities in the city.

The Guardian investigation revealed that very few petrol stations were dispensing fuel in most parts of the city, as queues stretched as far as the eyes can see.

It was observed that most of only the major marketers dispensed the products yesterday.

At the Oando filling station along Shasa Road in Egbeda area of Lagos, it was chaos let loose as it appeared all the city’s residents came to buy the scarce product petrol that hot afternoon.

The chaotic situation was replicated across the state as there were indications that the scarcity may get worse this week as most of the stations exhausted their stock at the weekend.

It was learnt that with the heightening scarcity, many stations have been making brisk businesses with a litre selling as much as N150.

In Asaba, Delta State capital, motorists paid as much as N130 for a litre of petrol as only few retail outlets currently sell as most of them are locked up with the ubiquitous “No Fuel” sign hung at their entrances.

On Nnebisi, Ibusa, Anwai and Summit Roads, only few retail outlets seem to have the precious fuel which of course they sold at very exorbitant prices.

While some that had fuel sold for N120 per litre, some sold for as high as N130 per litre instead of the approved N97 per litre.

As a result of the scarcity, there has been a rise in transport fares within Asaba as a trip to the Summit Road from Ogbeogonogo Market presently cost N70 instead of N40.

The Abia State Commissioner for Petroleum and Solid Minerals Development, Chief Okwubunka Don Ubani, has said that the present fuel scarcity in the country was artificial. He attributed the scarcity to greed and the penchant for exploitation and extortion by some marketers.

He said in a statement yesterday that the NNPC depot at Osisioma Aba has been supplied with fuel and has equally started sale of same to marketers in the state and environs.


Posted on March, 5 2014

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