Many questions, few answers to fuel debacle
Government was still insisting at the weekend that the price of fuel has not been increased or deregulated. But marketers, not taking the government seriously, have gone ahead to deploy all tactics of fuel price increase, starting with hoarding, write YAKUBU LAWAL, WOLE OYEBADE and TAIWO HASSAN
FUEL queues were back nationwide over the weekend. It was not because there was no petrol - the most widely used of the major four components of fuel (the others being diesel, kerosene and aviation fuel, Jet A1) - but the queues at filling stations were "artificially-induced" as government insisted at the weekend.
So, what was really happening out there as government agencies claimed that there was 40-day supply in fuel depots?
Why were filling stations "hoarding" the product by selling with one nozzle instead of eight or 10, as is the case in many of the stations? What is it that the marketers know that is hidden from the public?
Government officials had over the last four months been campaigning hard that without full deregulation of the downstream sector of the petroleum industry, the cartel of fuel merchants who had been short changing the citizenry would not stop. The cartel was reaping bountifully from the importation of the product to the detriment of the entire nation.
So, November 1 was fixed for the full deregulation. The Group General Manager, Public Affairs of the Nigerian National Petroleum Corporation (NNPC), Dr. Levi Ajuonoma said so in Kaduna when he led a delegation to that part of the country about four weeks ago to "inspect facilities and prepare the nation" for the take off of the deregulation. His colleague, Mr. Aminu Babakusa, the Group Executive Director, Commercial and Investment was at about the same time in Lagos to inspect facilities of private petroleum marketers in readiness for the take off of the exercise. He, like Ajuonoma, also said that there was no going back on November 1 take off date.
Then Labour and the civil society groups rose in stout condemnation of the deregulation and even threatened to shut down the nation's economy because, as they claimed, there was too much poverty, hunger in the land and an increase in the price of petrol would further worsen the conditions of the citizens.
About two weeks later, the Minister of Labour and Productivity, Prince Adetokunbo Kayode came out from the blues to deny that government had not fixed November 1 for the take off of the deregulation exercise. He, however, did not deny that deregulation would surely take place.
Labour and civil society groups tested their panned anti-deregulation rally in Abuja on October 29 and 30. Before the protesters got back to their various homes nationwide, fuel queues were back at filling stations. The stations had shut down their multiple nozzles except one to dispense fuel, thus creating queues that disrupted traffic in major cities and urban areas.
Some daring filling stations even upped their prices to N104 per litre of petrol on Saturday because, as an attendant of one of the filling stations in Apapa, Lagos said, "we know that government officials would not come to check us today (Saturday)". Having made quick kill, they reverted to the N65 per litre official price by late yesterday.
There were queues in almost all filling stations in Lagos throughout the weekend. At the Total Filling Station on Ikorodu Road, the supervisor on duty said that it was just a case of panic buying and nothing more.
"We have enough for as many as possible consumers. I think the buyers are in the best position to explain why they are anxious to buy so much. As far as we are concerned, there is no problem like hoarding the product," he said.
A resident of Lagos, Mr. Abayomi Samuel, however, remarked: "It is rather unfortunate that we are at it again. The issue of panic buying is not all there is to the problem. The issue is either one of artificial scarcity by the marketers who are eager to sell at the so-called deregulated pump price, or just an attempt by the Federal Government and NNPC to leave Nigerians with no other choice but the deregulation of the downstream sector."
A Lagos-based cleric, Pastor Emmanuel Abbah said: "I think what someone once said about Nigeria is true after all. The fellow said that God gave Nigeria everything except the wisdom to manage it. Almost at 50 years of independence, we are yet to get it right. Why should anyone blame a consumer for panic buying when almost all cannot do without it? Experiences of the past fuel hikes teach that government doesn't make empty threats about raising fuel price. No matter what the people think, their plans are usually carried out either by hook or by crook.
"We have people that are as insensitive as the petrol marketers. Why should NNPC announce a date for deregulation to start, only for the Federal Government to deny it yet, nobody is reprimanded for raising a false alarm, if it is actually one. Since the filling stations had turned to hoarding the product, why can't the appropriate authorities put them in check?" Abbah asked.
The Executive Secretary of the Major Oil Marketers Association of Nigeria (MOMAN), Mr. Obafemi Olawore, said there were sufficient petroleum products, especially Premium Motor Spirit (PMS), which could meet up with the domestic demand. He admitted that the queues in Lagos and other cities were as a result of the anticipation that the Federal Government might stick to the November 1 date.
He said: "I do know the nation has enough fuel. So, I really cannot understand why the present scarcity of the petroleum product and queues at the filling stations. Most of our filling stations have fuel. I think people are not convinced that the Federal Government will still not announce the deregulation plan, which was earlier said to take effect November 1. We have not been communicated that the deregulation will take effect November 1. So, people do not just want to be taken unaware."
In what appears to be a gradual but steady move towards entrenchment of deregulation in the nation's downstream sector of the Petroleum industry, the joint Committee of the Senate on Petroleum Matters may have recommended the scrapping of the Petroleum Equalization Fund (PEF) and National Midstream Regulatory Agency as contained in the Petroleum Industry Bill (PIB) currently before the National Assembly.
Already, the sub-committee on the downstream sector in its report to the Joint Committee which met in Calabar, Cross River State last month recommended that PEF and the Midstream Regulatory Agency be disbanded as their activities would negate the principle of deregulation in the post-reform era.
The sub-committee also rejected proposal in the PIB regarding modifications seeking to set up the National Midstream Regulatory Agency, noting that the setting up of such a body as recommended by the Oil and Gas Reform Implementation Committee and the NNPC has the effect of retaining monopoly of bulk marketing in the National Oil Company which they stressed would amount to retention of the current situation.
The sub-committee also rejected Section 348(d) of the PIB, which sought to mandate refining firms in Nigeria to own and operate all depots attached to their refining operations. According to the committee, such issue should be optional to the operators as allowing the clause would create the same situation in which we are today where NNPC enjoys the monopoly of refining and storage facilities at the detriment of several serious-minded private sector operators.
The report also rejected in totality section 350(5) of the PIB, which states that "no regional storage depot company shall engage directly or indirectly in any other operational activity in the downstream sector with the exception of bulk transportation".
The committee members rejected the section because it could kill the spirit of enterprise and promote monopoly.
Meanwhile, Ajuonuma advised yesterday against panic buying of petroleum products. He said that the Corporation has not increased its ex-depot price to warrant hike by oil marketers.
He said that there was no need for such action as the Corporation has enough fuel to last the country for three months.
"People should not get themselves involved in panic buying. We have over three months' stocks beyond Christmas period".
Besides a surplus of stock, he said NNPC also has long term plan to import products in the months ahead. Other market operators were also free to bring in fuel to make a robust supply.
NNPC, he added, has ordered for over 60 cargoes and the vessels have started arriving and discharging with many others on the Nigerian waters waiting to berth.
Petrol price after full deregulation would go for about N110 per litre based on the current international price benchmark. Kerosene will sell for between N100 and N110 per litre in filling stations within Lagos and its environs. Currently, it ought to sell for N50 per litre.
Citing alleged hoarding, industry regulator, the Department of Petroleum Resources (DPR) said yesterday it would start the monitoring of filling stations nationwide with effect from today.
The DPR said that it was aware of the artificial scarcity of products created by marketing firms in the country especially in Lagos and The Federal Capital Authority, Abuja, adding that it has sent out some of its workers to get first hand information of the situation.
The Head of Operations, Lagos Zone in DPR, Mr. Gbenga Koku confirmed yesterday that the Department would embark on the nationwide inspection this week.
He stressed that the monitoring would be carried out simultaneously, warning that any filling station caught hoarding products would face the wrath of the law.
According to him, the Department had perfected its strategy at the close of business on Friday to check the activities of marketers as it was envisaged that they would hoard product starting from weekend.
On punitive measures for defaulters, Koku said: "Any filling station caught would be shutdown indefinitely," he stressed.
A source in Petroleum Products Marketing Company (PPMC), a subsidiary of NNPC, said that the deregulation is a national issue that is being discussed at the national level by the Federal Government, Labour and civil society groups with stakeholders in the oil and gas industry, adding that the Corporation had no intention to increase its depot price.
The source explained that the PPMC has distributed petroleum products through its pipeline network nationwide.
He however pointed accusing fingers at the oil marketers whom he said capitalized on the postponed deregulation date.
He assured that the queues at the filling stations would disappear by today.
