By Clara Nwachukwu

Beginning from this month, Nigerians have kept their fingers crossed, waiting anxiously to see the queues disappear from the filling stations on account of petroleum products shortages, as promised by the Federal Government.

Scarcity is almost a natural phenomenon in Nigeria, as almost everything, from resources to capacity, appears to be in short supply. But the one that touches the labyrinth of the whole economy is fuel insufficiency, particularly of premium motor spirit, PMS, popularly called petrol.

Kachikwu

But to show it will make good its promises, a number of measures have being put in place to enhance products availability, and by Friday, many filling stations in Lagos now had petrol, although with the attendant very long queues that force motorists to wait many hours before they could fill their tanks.

The alternative to the queues is to patronise the black market operators selling in jerry cans at cut-throat prices of up to 250/litre in some locations in the country.

Tackling the problem

Upon apologising for some of his comments which irritated many Nigerians regarding when the fuel crisis will end, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, swung into action.

After the Easter break, he held a deluge of meetings with various stakeholders across the petroleum downstream value chain, with a view to restoring sanity in products distribution by April 7.

He sought and received acknowledgement for support from various groups from fuel importers and depot operators to marketers, comprising the majors and independents, and from petroleum truck drivers to security agents including the Nigeria Security and Civil Defence Corps, NSCDC, and the Nigeria Police.

The industry regulator, the Department of Petroleum Resources, DPR, and market regulator, Petroleum Products Pricing Regulatory Agency, PPPRA, as well as ports authorities were tasked to brace up to the challenge, as petroleum products distribution is to be treated as an emergency.

More importantly, is the plan to resuscitate products transportation through the System 2B Pipeline, which had been offline for months due to incessant vandalism for easier and speedy access to the Northern part of the country, as opposed to trucking which takes many days.

This is particularly so as beginning from April 1, cargoes were said to be confirmed to berth daily, according to the Commercial Director, National Petroleum Marketing Company, NPMC, Mr. Justin Ezeala.

According to him, “We are liaising with every stakeholder because the plan is to clear the major cities – Lagos, Abuja, Kano, first, and thereafter take on the state capitals over the next five days, and the rest of the country afterward.”

The public too was charged to desist from panic buying the ease the pressures from the retail outlets, while also being urged to report any malpractice they experience.

Petrol importation

To underscore the seriousness of the situation, government through the PPPRA, approved the importation for 3.5 million metric tonnes, MT, of petrol for the second quarter, Q2 import programme. The new volume is half a million above the 3million MT approved in the first quarter.

PPPRA spokesman, Mr. Lanre Oladele, explained that “The volume is higher than the first quarter because the PPPRA took into consideration the demand level and what will be sufficient for the country.”

Apart from the increase in volume, there were also changes in the allocation ratios among those licenced to bring in the scarce product.

Oladele told Sweetcrude said the ratio of importation is 41.73 for the Nigerian National Petroleum Corporation, NNPC and 58.27 for other marketers.

He explained that there was no division among the private marketers, as their ratio included the depot operators, majors and independents.  He adding that the criteria for selection was “based on established parameters, particularly past performances as there were those we gave allocations to but they could not bring in products.

“Others are ownership of outlets and access to foreign exchange because they had to assure government of their ability to source for foreign exchange on their own as demonstration of their capacity to deliver.”

The change in Q2 import allocations followed the inability of the National Petroleum Marketing Company, NPMC,  marketing arm of the Nigeria National Petroleum Corporation, NNPC, to meet the 78 percent import allocation it got for Q1.

The 60:40 ratio import allocation in favour of private operators was the norm in the past, until this year, when it was suddenly changed to indulge the NNPC.

Ezeala said the new allocations “is meant to free NNPC to import only for itself, instead of importing for everybody as we have been doing since this year.”

In agreement, Oladele said the reduction was at “the request of NNPC, so as to give them the opportunity to build on the strategic reserves, while ensuring that the refineries worked for seamless supply of products going forward.”

For Q1 imports, PPPRA, in its wisdom, allotted 78 percent to NNPC/NPMC and 22 percent to private operators, which included the majors, independents and depot owners.

However, none of the parties were able to meet their respective allocations, even as the allocation ratio was highly criticised as encouraging NNPC monopoly in products distribution.

The majors blamed scarcity of dollars for their inability to meet their share of the 22 percent import obligation, adding that “Under the second quarter programme, we will do better as long as forex is available, as NNPC has promised to assist us with the IOCs to access dollars.”

For the Independents, its executives promised that “In the spirit of reconciliation and patriotism, we have resolved to forget our differences and work together towards providing products to our various stations across the country in order to ease the hardship on Nigerians.”

They added that “IPMAN will liaise with the NNPC Management to facilitate the quick loading of about 7, 000 outstanding products tickets for onward dispensing into the hinterland across the country.”

National Coordinator, Mr. Mike Osatuyi, who had widely criticised the Q1 allocations said the current import programme is more reflective of marketers aspirations, adding that “NNPC’s promise for forex intervention will go a long way in solving the problem.”

Reports listed the beneficiaries of the Q2 import programme to include 47 companies, among them Oando, Sahara Energy, Forte, Conoil, MRS Oil and Gas, Shorelinks, Hyde Energy, Heyden and the local downstream subsidiaries of ExxonMobil and Total.

Prolonged shortages

Apart from the shortage ability of foreign exchange for marketers to import petroleum products another major challenge fuelling the products scarcity is the weather conditions in the western world.

Although the NNPC/NPMC claimed to have done 100 percent, but in actual terms, the volume of PMS brought could not meet daily domestic demand of 40 million litres, as even with all its dollars, it could not bring in enough petrol due to the winter season, when the overseas refineries produce more of automotive gas oil, AGO or diesel than petrol.

As a result, in the last couple of months, the country had been thrown into a major energy crisis, particularly of fuel and power, which had affected all spheres of the economy, thus crippling economic activities.

As Spring set in from March, ahead of Summer, hopes are brighter, as fuel blends will cater more for the need of the hotter regions like Africa.

This comes as efforts are being made to revive Nigeria’s ailing 4450,000 barrels per day, combined capacity local refineries, while efforts are being made to ramp up capacity to 650,000 barrels daily