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Fuel supply sabotage and the enemy inside

By Mazi Sam Ohuabunwa

PRESIDENT Muhammadu Buhari (PMB) threatened to find out the so called sabouters who caused the terrible fuel scarcity that disrupted the peace of most Nigerians over the Christmas/New year celebrations and to punish them severely. He made this threat in his new year address to the Nation on January 1, 2018. Firstly, I was not minded to take him seriously as it is common for government officials to manufacture “enemies” to explain away their failures.

Sometimes the threats are merely empty threats, just made to give the citizens false comfort as nothing happens thereafter. For example, look at the several threats issued by government after each orgy of violence by marauding Fulani cattle herdsmen and practically nothing happens until the next round and then new threats are issued, just as happened last week, after new round of killings in the Benue ‘valley of blood’. Rather than display integrity and accept blames for their failures, they will always look for a fall guy or some one or group to blame.

Every government does this but this particular government in power has excelled more than previous governments in manufacturing enemies and bulk passing. Nearly three years after coming to power, they have seldom ceased from blaming the past government or PDP for every of their failures. Now they seem not to find a way to pin this embarrassing fuel scarcity on the past government, hence they have come up with imaginary sabouters. Soon, to prove their point, they will arrest some ‘powerless’ fuel distributors perhaps by EFCC in the usual theatric manner, parade them,charge them to court, and then after the drama of arrest and the imposition of ridiculous bail conditions by the compliant judicial officers, the case will die down till the next crisis and we look for another set of fall guys or enemies!

True, we have watched this drama, long enough and many of us are getting bored. It is, therefore, in an effort to stop this boring drama this time around, that I am providing this intelligence to PMB pro bono. Where are the sabouters? The first are those we have elected or selected to run our government that have failed, refused or proven incapable of taking simple but bold decision to fully deregulate the downstream petroleum sector. If that decision is taken today, Nigeria will finally say bye-bye to this nagging and actually annoying perennial problem. I do not know what else anyone needs to say to PMB and his team to convince them to let go.

They stubbornly refused to let go, even when a pricing parity was achieved following the drastic fall of oil prices in 2015/2016 time frame, only to allow a drastic price adjustment that dislocated the economy and helped to fuel inflation. They are holding on again, and dilly dallying, seeking unsustainable options, till the pressure becomes unbearable and then they will be forced to allow another precipitate price adjustment, that will add insult to existing injury. Why we can not allow the market to determine the price of PMS as it is determining the price of diesel, rice, yam, garri, sorghum, millet, medicines, cars, books, air tickets etc etc, leaves me perpetually perplexed.

Last week, the Minister of State for Petreolum Resources, Dr. Ibe Kachikwu, announced to a bewildered nation that the NNPC had wasted or lost N85.5 billion of our commonwealth in subsidizing the importation of PMS. This same subsidized PMS was what most of us paid for again at N250 per litre at different locations in Nigeria outside Lagos and Abuja and those who paid N145 per litre lost many productive hours in long queues at filling stations in the two towns, which meant that all most all paid economic prices that were in excess of the official price. What a double or even Tripple jeopardy for Nigerians!

This is the same story for years, so much so that in 2011 or so this nation wasted nearly two trillion Naira in questionable subsidy payment. How long must we suffer these avoidable wastes or losses? If we were looking for economic sabourters, should we not first ask these government policy makers why they are wasting our scarce resources, resources that can be used to provide roads, railways, modern security and quality education amongst other critical needs crying for attention in Nigeria. Is there an addiction somewhere that is proving impossible to break?

If we are looking for sabouters, the second place to look is NNPC. We are sure to find many who are either directly sabotaging government’s wishes or collaborating with others to do so. It is commonly alleged in the Petroleum down stream sector that no one gets to lift PMS from many NNPC depots in the country without paying premium to the depot management in normal times. At abnormal times as we are just passing through, the premium is multiplied by factor ‘ x’.

Even at that, not all retailers are able to even buy directly from these depots at these elevated premiums. The scarce commodity is preferentially allocated to some well connected marketers who now resell at an additional mark up to other retailers. After buying at these inflated prices, the jobless DPR officers now start parading the streets to force the hapless retailers to sell at official prices and even go further to confiscate the fuel of some retailers, selling them off for free to Nigerian motorists. What a travesty of Justice!

Yes, there are a few retailers and marketers who can get extraordinarily exploitative and I fully support that they should be punished but the real problem is not with such. The real problem is that the NNPC and their officials make it impossible for many retailers to sell at the official price of N145 per litre, for the simple reason that their cost of purchase is above N145 per litre. According to NNPC, the current landing cost for those who import directly is N177 per litre. It will therefore be economic suicide for such retailers to sell at N145 per litre.

It is becoming clearer to many that some of the NNPC and DPR staff like this situation of monopoly of supply and price fixation. Many of them will become poor and some jobless if the down stream is fully deregulated and full supply is established. Any where in this whole wide world, that you create monopolies, corruption will thrive and distorted pricing regime will reign.





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