Posted by Femi Adekoya, Kingsley Jeremiah, Saxone Akhaine and Abdulganiyu Alabi | a week ago
Fuel scarcity gets messier as depots run out of stock
Independent marketers push for hike, sell at N180-N200/litre
Northern youths lament scarcity, demand sack of Sylva, Kyari
NLC: Nigerians paying heavily for darkness with failed privatisation
Barely one week after President Muhammadu Buhari approved an additional N10 for transporters of Premium Motor Spirit (PMS) across the country, petroleum marketers have decried the prolonged inability to load from NNPC depots, leaving them to depend on private depots that equally impose additional charges.
With additional charges from depots, marketers are decrying the cost of lifting products from depots, alleging that it is no longer sustainable to sell petrol at N165 per litre, despite a running subsidy, while subtly making moves to push the price to N180 per litre.
Recall that the Nigerian National Petroleum Company Limited’s (NNPC) Atlas Cove facility, which supplies petrol to a number of depots, including Ibadan, Ilorin, Ejigbo and Mosinmi, has been down, forcing the country to rely on a number of private depots. Presently, marketers depend on private depots along Apapa, Abule-Ado and the Lekki Free Trade zones in Lagos.
Indeed, fuel queues re-emerged, yesterday, in many parts of Lagos, Nigeria’s commercial capital, and its neighbouring Ogun and Oyo states, leaving passengers stranded across the states.
A survey by The Guardian showed that while filling stations claimed to have run out of stock, a few major marketers that were selling had long queues. Earlier, the filling stations that claimed to have run out of stock had told The Guardian that they had stock that could last many days.
Long queues created as a result of fuel scarcity have further worsened traffic on the Lagos-Ibadan expressway and within the Lagos metropolis.
Marketers also told The Guardian that NNPC has significantly reduced the level of daily truck out of the products even as tanker owners have reportedly started converting their vehicles to lift other goods instead of petrol.
According to findings, depots, which included NIPCO, AITEO, Ardova, among others located in Apapa were all out of stock as at 2:00p.m. yesterday. Some of the depot operators said there was a shortage in supply from the supplier of last resort: NNPC.
MEANWHILE, majority of the Independent Petroleum filling stations have unofficially increased the cost of fuel from N165 per litre to N200. They maintained that they are not certain at what cost they would get the commodity when it is eventually available at the depots.
Some motorists, who spoke to The Guardian, decried the resurgence in fuel scarcity, saying it has disrupted their daily schedules.
“I left home around 6:00a.m. with the hope that I would be able to get fuel at any of the filling stations along Ogunnusi Road, Ojodu. To my disappointment, none of the filling stations along the axis sold fuel.
“I and many others queued up at the filling station around FRSC office in Ojodu because the attendants told us they were expecting stock. I left after waiting for about two hours without any sign that they would soon get fuel,” one of the motorists, a civil servant, lamented.
Another resident said the fuel scarcity has further worsened the traffic gridlock on the Lagos-Ibadan expressway following long queues at filling stations near Lagos.
“In the whole of my area around Berger, Arepo, Ibafo, there is no fuel. This is beside the fact that we have not had light for the past three days,” the resident said.
The Nigerian Association of Road Transport Owners (NARTO) told The Guardian that although the President approved the upward review of the transportation claim, the new rate has yet to take effect, forcing haulage companies to park their vehicles instead of incurring losses due to the high cost of diesel.
With the electricity situation going from bad to worse, marketers said most retail outlets are also shutting down due to the high cost of running power generating sets.
The Independent Petroleum Marketers Association of Nigeria (IPMAN), yesterday, stated that the prevailing scarcity of PMS was due to its members’ inability to replenish their stock based on the current cost of loading PMS from private depots.
The Chairman, IPMAN, Lagos Satellite Depot, Akin Akinrinade, yesterday, stated that based on current economic realities, the sustainable price to sell PMS is N180 per litre.
According to him, most of its members have shut down their stations not because they are on strike, but because the operating environment is no longer sustainable to do business under the current price of PMS.
“Our members are registered to load with Pipelines Products Marketing Company (PPMC), but since December last year, not a litre has been lifted at the NNPC’s satellite depots in Ejigbo. We have tickets that have been paid for amounting to over a billion naira as far back as October last year and as we speak, these tickets have not been loaded, meaning that PPMC is holding on to our money.
“These are funds we are supposed to use to run our businesses. We are businessmen, we take bank loans and now we are paying for money that we are not using,” he explained.
He pointed out that the immediate challenge to its members is the inability to load from NNPC depots, saying that the only option was to depend on private depots along Apapa, Abule Ado and the Lekki Free Trade zones, most of which he said have increased their ex-depot price to a level no longer sustainable for its members to sell at N165 per litre.
“As I am talking to you today, no private depot is selling below N162 per litre. We still need to add cost of transportation, which is between N6 to N8 depending on the distance within Lagos and if it is outside Lagos, it is more than that and if you add the transportation cost to N162, it is already N170 and do not forget that this product is regulated by the Federal Government.
“We have not even added other charges at the depots and the running cost of our stations. Our members can no longer sell at N165 and in fact, there is no reasonable businessman that can sell below N180 per litre,” he lamented.
IN April, while approving a revised budget of N17,319,704,091,019 trillion for the 2022 fiscal year, the National Assembly approved N4 trillion fuel subsidy budget.
Amid heavy borrowing, the International Monetary Fund (IMF) had in fact said with fuel subsidy payout averaging N500 billion monthly, Nigeria may spend N6 trillion to subsidise petrol before the end of this year.
While it is now clear that the Russia-Ukraine war may linger indefinitely as Nigeria has been unable to maintain oil production targets, stakeholders fear that the fuel crisis may go from bad to worse, adding that NNPC may be unable to meet with its Direct Sale, Direct Purchase scheme. The scheme enables the country to swap crude oil for refined products.
In Abuja yesterday, most fuel stations belonging to the Major Oil Marketers Association of Nigeria (MOMAN) and Independent Petroleum Marketers Association of Nigeria (IPMAN), including Total, Mobil, Eternal and others were shut, while a handful that sold the product dispensed from few pumps.
National President of NARTO, Yusuf Lawal Othman, told The Guardian that some haulage firms had parked their vehicles over high operating expenses, especially the cost of diesel, stressing that although the government had agreed to review the rate, the directive is still being processed and may take weeks or months.
He asked members of the association to immediately resume operations adding that fuel queues will disappear in a matter of days.
Othman equally urged the public to avoid panic buying, stressing that the association will do everything possible to increase distribution capacity.
While motorists struggle for the product, black marketers have since returned to the nation’s capital, with a litre selling for about N400.
A motorist, Yaro Abdurazaq, while lamenting the situation, said there was need to urgently address the “unbearable challenge.”
On Kubwa expressway and parts of the city, especially Jabi, Wuyi, Wuse, Central Business District, Garki and others, few filling stations were dispensing.
On the airport axis, Shema filling station was without fuel. NIPCO was dispensing amid a long queue. Dan oil was under lock and key, The A.Y Shafa, adjacent to Dunamis Church, was also under lock, as well as Mobil.
Chairman MOMAN and Managing Director, 11 Plc, Tunji Oyebanji, had earlier decried the postponement of full deregulation of the downstream sector, stressing that liberalisation of the sector will enable investors across the value chain to have adequate returns on their investments.
Executive Director of Rainoil Ltd., Emmanuel Omuojine, equally noted the need to remove subsidies on petrol. Asking government to take the right step on subsidy, Omuojine said removing subsidy would add significant value to Nigeria’s foreign exchange reserves on the macroeconomic level.
Former President of Chartered Institute of Bankers of Nigeria (CIBN), Prof. Segun Ajibola, had said there was need for government to make local refineries work to meet local demand for refined products.
“It is embarrassing that Nigeria has three major refineries that have turned moribund, hence, we keep devoting scarce forex towards importation of refined products,” adding: “Let’s divert the forex towards the turnaround maintenance of the refineries and become self-sufficient in meeting local demand for refined products. If Nigeria lacks the local capacity to manage refineries, let’s engage technical partners for that purpose.”
An energy lawyer, Madaki Ameh, described the country’s present situation as disastrous and failure on the part of the current government, caused by having round pegs in square holes.
Ameh believes that the current Minister of State for Petroleum Resources, Timipre Sylva, has no oil and gas knowledge or experience, stressing that key ministries and departments of government must not be manned by people with little or zero knowledge of the industry.
“The challenge of pricing of products will remain with us until the government is prepared to do the right things and implement the right policies in the entire value chain from the upstream, through the midstream to the downstream. The oil and gas industry and the power sectors are poorly managed,” he said.
FOLLOWING lingering problem of fuel scarcity and the pathetic situation of the nation’s petroleum sector, Northern youth groups have called for the immediate sack of critical stakeholders, including Sylva, for poor handling of the sector and the pains they have inflicted on Nigerians.
The Amalgamation of Arewa Youths Groups (AAYG), an umbrella body of 225 socio-cultural and socio-religious body in the North, yesterday, expressed dismay over lingering fuel scarcity in the country and called for an overhaul of the oil sector.
The secretary and spokesman of AAYG, Comrade Abubakar Musa Ardo and Victor Duniya respectively, said “Nigerians are currently battling with the excruciating pains of fuel scarcity, the situation has remained like this for the significant part of 2022, with no end in sight.
“Where you manage to see little of the fuel, it sells between N250 and N300 per litre in broad daylight without fear of government regulatory agencies. This is against the national benchmark and highly subsidised rate of N165.”
Ardo said: “As critical stakeholders in the Nigerian project, we can’t continue to fold our hands and allow things degenerate to point of no return. There is no justification for this scarcity amid abundant blessings of crude oil in most parts of Country, that are both tapped and untapped.”
Besides, he remarked, “during the previous scarcity in the early part of this year, both the NNPC and Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) accused some major importers of importing high methanolic contaminated PMS, with the promise of bringing the said companies to justice, however till date, nobody has been punished for inflicting pains on Nigerians.
“It is against this backdrop that we call on Mr President to wield the big stick on the trio of Mr Timipre Sylva; NNPC GMD, Mele Kyari and MD NMDPRA, Farouk Ahmed for clear acts of sabotage and an attempt to pitch Nigerians against him.”
The group also called on the National Assembly to probe the subsidy regime and compare notes with previous years to unearth the rigged figure by both NNPC and NMDPRA, and ensure that all those concerned are punished.
“If our demands are not met in the next five working days, we shall organise our members to occupy all NNPC zonal offices and its subsidiaries across our region and the FCT until we see changes. This is not just a mere threat. We will follow up with full action after the expiration of our ultimatum,” the Northern group added.
IN a related development, President of the Nigeria Labour Congress (NLC), Ayuba Wabba, has criticised the privatisation policy of the Federal Government, especially in the power sector, insisting that Nigerians are being forced to pay for darkness.
Wabba made the claims on Monday at the maiden edition of Nigeria Employers Summit 2022 organised by the Nigeria Employers Consultative Association (NECA) in Abuja.
Wabba, who was represented by the Deputy President of NLC, Najeem Usman Yasin, lamented that the development will continue unless the national infrastructural gaps are addressed.
He said: “The recent slump in the national electricity supply, which is a result of constant failure of our electricity grid indicates that Nigeria still has a long way to go in making power supply available to the citizenry.
“The organised private sector has concluded that the state of public electricity supply as of today, has shown that most productive and residential areas in Nigeria no longer enjoy up to six hours of electricity supply.
“This has confirmed that the recent privatisation of Nigeria’s power sector is a complete failure.
“Nigerians still pay heavily for megawatts of darkness.” NLC, however, urged government to consider a reversal of the privatisation of the power sector and return assets to Nigerians.