Mr President, End This Fuel Scarcity Now
By Austin Cyril,
Almost every administration in Nigeria is signposted by crippling fuel scarcity across the nation. Nigerians had hoped that the advent of Buhari would finally bring an end to that perennial problem. But here we are, 3 years into the administration with another lingering fuel scarcity in the country.
On 11th May 2016, the present administration finally announced the expected upward review of the pump price of petrol. The weeks leading up to the increase followed a pattern Nigerians were already used to. First came the scarcity of the product followed by the abundance of the product in black markets across the country.
Naturally, the black market price was way more than the official price. In some locations, people were buying a liter for as much as 250 as against the 86.50 pump price. The government finally pegged the price at 145.
The justifications for the increase were not compelling enough to make discerning watchers think this was the break of a new dawn in Nigeria. But the government insisted this time, things would be different as the price increase represented a deregulation of the market. In effect, it announced the end of the notorious subsidy payment which many political jobbers and their friends took advantage of to become stupendously rich.
Another benefit of the so-called deregulation was that it would once and for all bring an end to the endemic and perennial fuel scarcity and scarcity of other petroleum products. Nigerians bought the excuses and gave the government the benefit of the doubt.
Fast track to a year and some months later. December last year to be precise; a few weeks to Christmas. It all started like a bad rumor from fifth columnists. The various stakeholders in the downstream sector of the petroleum industry started trading accusations against each other.
The independent marketers, through their association, Independent Petroleum Marketers Association (IPMAN), claimed a pump price of 145 was not sustainable because the depot price did not give enough margin for profits. Depot owners, via the umbrella body, Depot and Petroleum Products Marketers Association (DAPPMA), denied the allegation.
According to them, they don’t have enough stock to sell even though they had paid the sole importer of petrol, the NNPC, for products. And the NNPC, of course, insisted they are not owing anybody and claimed that DAPPMA and IPMAN were only taking Nigerians for a ride to create an artificial fuel scarcity.
Like a bad dream, the fuel scarcity hit the country full blast a week before Christmas. Two months into a new year, the country is still living with that scarcity despite countless assurances from the government that it would be remedied.
What are you doing Mr. President?
As the substantive petroleum minister, it is shameful that President Buhari has failed to address the issue decisively whether with words or actions. One reason the President decided to directly supervise that ministry was to make sure something like this did not happen. And of course, to eliminate the corruption stagnating the growth of the industry.
It is not as if the President doesn’t have able lieutenants to help him. In Ibe Kachikwu, he has a seasoned technocrat as his Minister of State. In fact, most people see Kachikwu as the de facto head of the petroleum ministry since the President is most times busy with other state matters. So with Kachikwu and his experience coupled with the direct involvement of President Buhari, why is the country going down this tiresome route again?
And what is the role of the NNPC in this latest saga? Let’s hope that the spat between Ibe Kachikwu and the NNPC head, Dr Maikanti Baru, is not a factor in resolving the crisis. Recall that last year, Kachikwu accused Baru of spending huge sums of money without taking permission from the board. Baru countered saying he had the full permission of the President as earlier reported by Nigeria News.
However, at the time Baru said he got the go-ahead, the president was treating a serious ailment in a London hospital. Nobody outside of government knew how that crisis was resolved. But Kachikwu came out with egg on his face as the expected reprimand from the President to Baru did not materialize. Some even suggested Kachikwu should have resigned in protest.
This was a huge distraction for the people charged with ensuring there was no glitch in the supply of petroleum products. Perhaps, it is possible underlings in both camps are working at cross-purposes with the blessings of their respective bosses.
The reality starring Nigerians in the face
It should be noted for the records that, as far as seamless supply of petrol across the country is concerned, President Buhari has failed miserably. The burden placed on Nigerians by increasing the pump price of petroleum almost two years ago is about to get heavier.
Haven’t we seen this before? First, there is scarcity. People resort to the black market to get petrol. Government officials and other stakeholders in the supply chain continue passing the buck with nobody willing to take responsibility. Finally, there would be an increase in the pump price.
This time around, the excuse would be that with the rising cost of crude oil, the cost of importing petrol has increased. Now, in a completely deregulated market, this wouldn’t be an issue as the private sector charged with importing products would adjust the price accordingly with little fuss without waiting for the government to fix a price for them. That is how things are done in a completely deregulated market.
Ultimately, the solution is for government to steer clear of importation and stop the price fixing. Sticking to a method that has failed over and over again is the definition of stupidity. The downside, though, is simply this: the masses would really suffer in a deregulated market as the pump prices would be very high. Only the government would benefit as the subsidy (yes, subsidy is still around) would now be available to the government to use on other things.
For now though, we are waiting on Buhari to dig himself out of the hole he created for himself two years ago. Whatever he does, Nigerians need the fuel scarcity to end in the short term. As for a long-term solution, he is the minister in charge. Let him show he is not clueless by laying the framework for a more robust way of handling the supply of petrol to and across the country. Maybe, a commitment to fixing the refineries would be a good start.