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Time to end the fuel supply fiasco

FUEL scarcity, which makes life unbearable for Nigerians, has been a fixture of life in Nigeria since the country became  a crude oil exporter first, and then importer of refined products later. Interestingly, it was a phenomenon unheard of when the nation was not a leading producer of crude oil. The problem started when the Federal Government intervened in the supply of petroleum products to the people.

The Ministry of Petroleum Resources, which did not exist in 1960 and the Nigerian National Petroleum Corporation, NNPC, created by the military in 1978, whose fore-runner was the  Nigerian National Oil Corporation created in 1971, combined to spawn and sustain a problem which has defied solutions. The Ministry and virtually all its subsidiaries, have over the years failed to fulfill their missions. They have instead become mere opportunities for top government officials to corruptly reward their cronies, feather their political nests and gratify their political associates.

The NNPC’s four refineries, which in other countries would be regarded as assets, have become exponential liabilities draining funds from the Federation Account. Dr Ibe Kachikwu, the immediate past Group Managing Director of the Corporation, like his predecessors, had promised Nigerians that he would restore the refineries to full capacity. By the time he was replaced, that promise remained unfulfilled. Now, none seems to be functioning. The system has become so dysfunctional that nobody can argue against its total overhaul.

Moving forward, the place to start is to get government out of our petroleum products supply system. The blame for the hardships suffered by Nigerians during the 2017 Yuletide should be shared by the incumbent and former presidents. We have had 26 years to deregulate the oil sector in line with the recommendations of the Nigerian Economic Summit Group, NESG, since 1992. Each regime failed to address deregulation because it served political interests due to reluctance to hands off the oil sector, a cash cow for corrupt politicians. Buhari has not even considered it. Twice Jonathan had the opportunity to get the Petroleum Industry Bill, PIB, passed but failed to muster the political will.

We can no longer continue this way. A country where investors cannot count on steady supply of fuel at fairly predictable prices cannot be a top investment destination for the global community. Buhari and his party promised three million jobs. Instead eight million jobs have been lost. A substantial number of those job losses occurred because fuel prices are generally high and supply not reliably available.

It is a generally accepted principle in management, whether in the private or public sector, that a calamity which occurs twice should not occur again under the same set of managers. We must, in 2018, pass the PIB and hand over the production and supply of petroleum products to the private sector while government maintains eagle-eyed industry regulation.

 


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