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Senate Gives Ultimatum On Fuel Scarcity

President Muhammadu Buhari’s Fiscal Policies Have Been Blamed As Hampering Fuel Imports While Scarcity Bites And Senate Expects Situation To Abate In Two Weeks

Massive commodity losses coupled with stringent economic and financial policies of the present administration of make it difficult for the supply to normalize in the nation’s domestic fuel market.

The revelation comes as the Senate yesterday mandated the Ministry of Petroleum Resources to brace to the daunting task of addressing the prevailing acute scarcity of petrol in the country by sanitizing distribution processes. According to investigations by The UNION, the controversial Treasury Single Account (TSA), acute foreign exchange crunch and widening value differential between the United States dollar and the Nigerian Naira impose huge trading constraints that have resulted in glitches in petroleum product importation.

Whereas the TSA forms part of the factors that cause the debilitating cash crunch that plunged the nation’s refineries into protracted downtime, inability of marketing companies to mobilize adequate foreign exchange to fund importation has also slowed down importation. The situation which has left the Nigerian National Petroleum Corporation (NNPC) as the primary source of fuel supply to the country also places the entire market in a very precarious supply situation as the corporation begins to declare massive product losses.

Sources at the Apapa petroleum product depots stated that fuel cargo traffic at import reception jetties has not been good since the third quarter of the year, a situation he said has created supply gaps that result in the prevailing scarcity across the country. He added that despite the belated release of last quarter import allocations by the Petroleum Products Pricing and Regulatory Agency (PPPRA), importers have not been able to draw in any of the petrol cargoes that hover around the country’s coasts because of constraints in obtaining both foreign exchange and letters of credit from banks that currently suffer cash purge following the introduction of TSA.

A source which holds key operations position in one of the biggest depots in Apapa told The UNION that all the storage depots in the cluster are limited to throughput activities with little or no import in the past five months. The situation, according to him, does not project a good outlook for the market which is facing high demand yuletide season which is the country’s most active driving season. “What you can see from this is that while demand is rising, supply is falling. So how far can the NNPC stock go? But let’s see how they handle it,” he said.

Group Managing Director of NNPC, Dr. Ibe Kachikwu, who also doubles as junior oil minister, had banked on supplementary supplies by key marketing companies to address the prevailing supply concerns before Christmas and New Year movements.

He said in Lagos that government has already approved payment of the lingering N413 billion fuel subsidy claims, expressing hope that marketers would plough back the money in last minute fuel importation. Executive Secretary of key import group, Major Oil Marketers Association of Nigeria (MOMAN), Mr. Thomas Olawore, had stated that whereas marketers had received the news of the payment approval, they have not been paid. The funding impasse in the importation chain leaves the market precariously in the hands of NNPC whose facilities have remained traditionally vulnerable to thieving vandals and racket syndicates in the distribution chain.

The corporation declared yesterday that it lost 531 million litres of petrol valued at over N50 billion to thieves that regularly vandalize its pipelines in the Southwest axis of the country. NNPC stated that the product was lost to pipeline vandals between January and September, 2015, at the problematic System 2B Pipeline network which stretches from the Atlas Cove in Lagos to Ilorin.

Managing Director of the Pipelines and Product Marketing Company, PPMC, a subsidiary of the NNPC, Mrs. Esther Nnamdi-Ogbue, stated that the losses which chiefly accrued from the incessant hacking of the pipeline at the notorious Arepo to Mosimi axis of the pipeline.

Mrs. Nnamdi-Ogbue stated in a presentation to the Senate Committee on Downstream Petroleum that regular attacks on the pipeline has made the task of providing seamless flow of petroleum products to retail outlets more burdensome. She said the company is now limited to massive truck-out from depots in Lagos, Oghara and recently Calabar.

She added that the situation is worsened by activities of some unscrupulous marketers involved in hoarding, sharp practices and diversion of petroleum products for sale in black markets across the country. “We view this as a distortion to the economy and we have invited the DSS and the EFCC to take action,’’ she said.

Earlier, the Group Executive Director, Commercial and Investment, Dr. Babatunde Adeniran, had told the Senate Committee that the fuel situation was exacerbated by the inability of oil marketers to meet their import allocation quota due to outstanding subsidy payments thus creating a gap which PPMC has been working round the clock to bridge despite the extraneous challenges like hoarding and incessant pipeline hacking. Permanent Secretary of the Ministry of Petroleum Resources and leader of the delegation, Dr. Jamila Shu’ara, also harped on the need to build strategic reserve stock of petroleum products similar to the national grain reserves across the country.

Despite the explanations, Committee Chairman, Senator Uche Ekwunife, handed a two week ultimatum to the Ministry to ensure sanity in the supply and distribution of petroleum products across the country and also bring pump at par across the country. Though the committee was not specific on if the legislative harmer would fall in the event the situation failed to abate within two weeks, but the lawmakers however told the managers of the sector to make the product available nationwide and at uniform price.

The Senate had on Tuesday, mandated the Committee to urgently examine all the issues associated with the current scarcity of petroleum products in the country; determine how the legislature would collaborate with the executive arm of government to bring lasting solutions that would prevent any future problem of fuel scarcity in the country.

The directive followed a motion brought to the Chamber by Senator Barau Jibrin (APC, Kano North) and cosponsored by 23 other Senators, which they entitled, “the current fuel scarcity all around the country and the need to urgently resolve the crisis”. Issuing the directive to the stakeholders, Senator Ekwunife noted that what Nigerians needed at this point was to see an end to the menace, and not to listen to stories from stakeholders.

“Nigerians want to see the immediate end of this fuel scarcity and also the uniformity of the price of the product across the country. As a Committee, our target is that scarcity and discrepancies in price must stop and it must be done. “Therefore, we are mandating the Minister, the Permanent Secretary and other relevant agencies in the sector, that fuel scarcity must stop in the next two weeks, and must be sold at the uniform price of N87 per liter everywhere in the country”, she ordered.


– Sopuruchi Onwuka and Emeka Ekpunobi 

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