Scarcity fosters oil market deregulation

on   /   in Sweet Crude 10:00 am   /   Comments

Year 2012 was heralded with downstream petroleum sector crises, and as the year winds up, the crises have instead exacerbated, which now threatens to spill over to the New Year. Sebastine Obasi, writes, the crises may have unwittingly, prepared Nigerians for the deregulation of the sector, which Nigerians insist must come with palliatives.

Uncertainties have continued to becloud the oil and gas sector with a few more weeks to the end of the year, just as it happened in the New Year, when the country was thrown into a volatile situation following the increase in the price of petrol from N 65 to N 97 per litre.

For four months now, fuel scarcity has persisted as the Nigeria National Petroleum Corporation, NNPC, could not meet the demand. Similarly, major and independent marketers have not started full importation of petroleum products. The reason may not be far-fetched.

Pump price hike

Rumours of an impending complete removal of fuel subsidy in 2013, have enveloped both the marketers and the consumers. Consequently, motorists have been compelled to buy petrol far above the official price of N 97/L, as prices now range between N110 and N140/L depending on the location or outlet.

In Lagos, some petrol stations have not been operating, due to lack of supply. At the few ones that opened, long queues were seen, as motorists waited patiently for their turn. On KudiratAbiola road, between Alausa and Ojota, the filling stations of Mobil, Total, Conoil, sold petrol between N110 and N120 per litre, while the two NNPC stations were closed.

The situation was not different on Oba Akran road, Ikeja, where Forte oil and Mobil filling station sold at N110 respectively. Also at Maryland, Mobil, Conoil and Oando filling stations sold between N110 and N115.

Kunle Ajanaku, a motorist at Mobil, complained of the hardship he as to undergo by queuing for a long time and buy at a price higher than officially approved.  He said the government should ensure petroleum products are readily available, to reduce suffering of the populace. A male attendant who refuse to give his name justify the higher price petrol is sold thus; “We bought at higher price and so we needed to sell to make profit”, he said.

Price hike amidst nationwide scarcity

In Owerri, Imo State, motorists had to contain with a higher price as petrol is sold between N120 and N140 per litre, where it is available. SweetCrude learnt that this has been the situation since April this year. At the NNPC mega station however, the N97 official price still held, when the product was available. Long queues at filling stations are the order of the day.

In neighbouring Umuahia, Abia State, scarcity of petrol has not abated, thus making motorists to buy the product at between N120 and N135/L. In the remote areas of the State, residents buy the product between N140 and N150 per litre, despite the emergence of a task force set up by the State to monitor prices of petroleum products.

The scarcity is not restricted to the South East. In Jos, Plateau State, queues at petrol stations have persisted for more than four months, giving rise to emergency hawkers who make brisk business by selling in jerry cans and other containers. While the product sold for between N130 and N150 per litre at filling stations, the road side hawkers sold for N170 per litre. Ironically, motorists patronize the road hawkers because it is easier to buy from them than from a petrol station.

Persistent fuel scarcity has become a common feature in kano, just as in many other states in the North. Even before the official price was pegged at N97 per litre, residents of Kano have been buying the product at about N120 per litre. For more than one year, roadside sell of the product has become a regular phenomenon. Presently, petrol is sold between N140 and N150, while in the rural areas; the price could be as much as N160 per litre.

Government has no palliatives

With just a few weeks to the end of the year, there seems to be no end in sight to the fuel scarcity imbroglio. The situation is compounded by the inability of the federal government to tackle head on the deplorable condition of the country’s four refineries.

At the peak of the nationwide protest that greeted the January one arbitrary increase in the petrol pump price, Mrs. Diezani Alison-Madueke, Minister of Petroleum Resources, had said that the refineries would be made to operate optimally. She also said that new refineries would be built to increase the local refining capacity.

The much expected turn-around maintenance, TAM, is yet to be carried out while new refineries are yet to be built.

Too many committees, no solutions

One of the fallouts of the fuel protest was the setting up of three committees by government: the Special Task Force on Governance and Controls, headed by Dotun Sulaiman, which was charged with the responsibilities of reviewing all management controls within NNPC and other subsidiaries; the Kalu Idika Kalu-led National Refineries Special Task Force was charged to conduct high assessment of the refineries and review past reports, while the Nuhu Ribadu-led Petroleum Revenue Special Task Force was mandated to determine and verify all petroleum revenues due and payable to the federal government.

Following the submission of the reports of the three committees, the federal government raised three other committees to draft white papers on the reports of the previous committees. After the inauguration of the committees, Reuben Abati, presidential spokesman said; “the committees are to study the reports, review the issues raised and prepare draft white papers for the consideration of the federal executive council within two weeks.”

But Peter Esele, President General of the Trade Union Congress, TUC, said that running government by committees and task forces is a clear indication of failure on the part of government. According to him, there are government institutions that are supposed to handle government assignments, but most of them have been weakened and made redundant, while government continues to set up committees to create job for the boys and politicians.

“Since 1999 till date, government has set up so many committees and task forces, but the question is and has always been, how many of the committees’ reports have been implemented? Government that set up the committees has abandoned majority of their reports,” he said.

A Jos-based constitutional lawyer, Lawrence Anyia, argued that the committees are not helping anything at all. “We are beginning to discover that these committees are stultifying the progress of governance. It has become a rollicking chair. You sit on and you begin to rollick without movement, motion without movement,” he said.

As the Yuletides set in, Nigerians are apprehensive that their quest for a smooth Christmas celebration may not be achieved unless the government drastically tackles the various challenges in the oil and gas sector.

Although, Alison-Madueke has reassured all of adequate supply of fuel during the period, but only time will tell.

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