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Fuel scarcity: Marketers await FG on deregulation

By Udeme Clement
FOLLOWING the prevailing    scarcity of petroleum prod        ucts in the country since  December 2009, independent marketers are now awaiting Federal Government’s directives on the deregulation of the downstream sector of the economy to embark on full stream importation of products.

Sunday Vanguard gathered that despite the controversy surrounding the deregulation policy and the face-off between Nigerian Labour Congress (NLC) and government on the issue, marketers are already warming up for the exercise.

The national president, Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr. Tunji Adeniji, told Sunday Vanguard  that  deregulation of the petroleum sector was imperative. This, he said, would create a synergy in the system with a view to ensuring that products are made available in every part of the country.  “We are awaiting government on deregulation because that is the only practical solution to fuel scarcity. At this point, we must also realise that deregulation can not be achieved in a situation of scarcity”, he stressed.

He said that importation of petroleum products into the country was left only for Nigerian National Petroleum Corporation (NNPC) since the last quarter of 2009, adding that it was only in November last year that  independent marketers were told to import. “We were told to start importation only in November and, by that time, commercial banks were not ready to give out money”, he asserted.

Adeniji pointed out that NNPC alone cannot meet the increasing need of fuel consumption in Nigeria with a population of over 140million. To him, the inability of the corporation to meet the demand of consumers is responsible for the long queues at the filling stations.

The IPMAN president  said Nigeria imports 82 per cent of petroleum products due to the inactive state of local refineries. He said, “The refineries can only do 18 per cent. This shows that independent marketers must be actively involved in importation business to ensure that petroleum products are available and adequately distributed. Once that is achieved, long queues would disappear from the petrol stations”.

He, for instance, noted that the capacity of petroleum production needed for local consumption in the country is estimated at over 30million barrels per day, adding that the major problem is that local refineries are inactive.
Adeniji  advised government to expedite action to  revamp the  refineries to make them function optimally.

“The demand for petroleum products is increasing by the day and there is urgent need for government to make our refineries function so that we do not depend totally on importation of fuel for daily consumption”, he  pointed out.

Government had, last year, made its position known on the issue of petroleum subsidy, which has generated so much controversy in the country. Government further suggested a systematic removal of the huge sum of over N1.5 trillion being paid as subsidy for petroleum products on yearly basis as the solution to fuel scarcity, saying  the subsidy is taking its  toll on  economy and does not propel growth.

As such, a new structure must be created to allow the sector operate independently to optimise output  both in the short and long run development. The argument was that the whooping sum paid as subsidy is almost like a capital budget  and should be channelled into local production to increase capacity utilisation in the petroleum sector.

But, the NLC said abolishing subsidy over night could cause confusion in the system and increase hardship for the masses, adding that government must put certain measures in place before embarking on the  exercise.


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