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Deregulation: Scarcity looms as marketers suspend importation

UNCERTAINTY seems to be looming in the oil sector over the November 1 set date for implementation of the full deregulation of the downstream sector following the threat of the  Nigeria Labour Congress (NLC)  to shut down the country’s economy if the policy takes off on that date.

The uncertainty has now forced Major and independent marketers in the country to suspend importation of petroleum products, a move which has signaled a fresh round of scarcity across the country.

The federal government has however denied any  intention to deregulate the downstream sector on the said date, even as the major marketers claimed that their decision not to import was borne out of the government decision not to issue import permit to any importer other than the Nigeria National Petroleum Corporation (NNPC).

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It was however gathered that part of the marketers reason not to import products is in an effort to ensure that they do not run into murky waters as a result of the governments new policy, especially as some of them are still rattled by the ongoing reforms in the banking sector.

This development came just as the federal government has also distanced itself from the purported November 1 date for the implementation of the full deregulation of the downstream sector.

Not a few marketers complained that they are not very sure of the government’s seriousness towards the issue, especially as the Labour unions under the Nigeria Labour Congress have threatened to embark on a nationwide strike to register their displeasure with the federal government over the issue.

Saturday Vanguard investigations further revealed that currently the Nigeria National Petroleum Corporation(NNPC) has been saddled with sole responsibility of ensuring a steady flow of supply and importation to the country, a move which many industry operators have condemned as an invitation to nationwide scarcity.

An industry source who spoke on the condition of anonymity noted that the NNPC simply does not have what it takes to supply the entire country as swiftly as required.

According to him even if they berth 90 vessels as being speculated it would require a while for them to all get offloaded, after which the problem of distribution comes in.  “How many trucks does the NNPC have to take products to the hinterland? he queried.  How many distribution outlets do they have to dispense products to Nigerians on a steady basis?  Which simply means that they would still require the collaboration of these marketers.  So why stop them from importing in the first place?  What economic sense does that make?

What is the government trying to achieve with this seeming illogical decision?  Its high time we get serious in this country rather than toying with the comfort of the already suppressed and oppressed populace. He fumed.

Speaking with Saturday Vanguard over the telephone, the Executive Secretary of the Major Oil Marketers Association of Nigeria (MOMAN) stated that the marketers did not suspend importation of products, rather it was the federal government that refuse to issue approval to all marketer, both Majors and Independents alike.

“No import approval has been issued as we speak, and only the NNPC has been authorised to import products into the country, so it is not a collective decision of the marketers as being speculated.”

However, Vanguard further gathered that the marketers are comfortable withdrawing their services because of high level of uncertainty in government circles as well as uneasiness amongst the marketers regarding huge unpaid subsidy claims by the Petroleum Products Pricing and Regulatory Agency (PPPRA).

Meanwhile long vehicular queues have resurfaced in major parts of the country as Nigerians commence panic buying of petroleum products.

A drive around the Lagos metropolis reveals that the few marketers that still have products are experiencing heavy queues, while some other marketers are hoarding the product in their tanks.

In a swift reaction however, the PPPRA has confirmed that it was not directed to Withhold the issuance of Importation license of petroleum products by the marketers.

According to a statement issued and signed by the Agency’s Executive Secretary it states that the Agency is alarmed by reports in some national dailies, that it has been directed by the Federal Government to stop the issuance of import licenses to petroleum products Marketers.

“Ordinarily, we would have ignored such inciting and misleading reports, but for the purposes of putting the facts straight, the Agency has deemed it necessary to state the issues as they truly are.

The Agency has observed with keen interest, the issues being raised on the importation of petroleum products.  There is no iota of truth in the statement credited to the Agency that the Federal Government has given a directive preventing the importation of petroleum products.

Indeed, products have been imported into the country in large volumes to meet our national requirements.

The Agency has continued to monitor the supply situation and is taking every step required to ensure that there is no disruption whatsoever in the supply system.

With all emphasis at our disposal, the Federal Government has not directed the Agency to act contrary to the provision of its mandate; to ensure availability of products nationwide and maintain a level playing field for all stakeholders.

Furthermore, the PPPRA will also like to reiterate that contrary to recent speculations in the media on the proposed deregulation of the downstream oil sector, the Agency has not received directives from any quarter that the policy will commence on November 1, 2009. Nigerians are hereby reassured of government’s determination to continue to engage all Stakeholders on the subject before the take-off of the policy.

The PPPRA hereby wishes to assure Nigerians of its commitment to service delivery and its continued resolve in ensuring adequate supply and distribution of petroleum products nationwide.


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