Changing the strategy of fuel supply

Despite the promises of the Minister of state for petroleum, Ibe Kachikwu and efforts by the Nigerian National Petroleum Corporation, NNPC, to make available fuel and end the excruciating scarcity currently being experienced across the country, it does appear the strategies are not working because the queues have refused to go at the filling stations and the hiked prices have refused to come down in most parts of the country.

If the situation remains the same, it means both the government and the NNPC have to reconsider their strategies and logistics to ensure constant supply and availability of the product.

However, the NNPC needs to answer some urgent questions about its supply logistics. One, is the   NNPC actually supplying the country 40 million litres everyday as it promised about two weeks ago? Two, how much monitoring are the agencies such as Department of Petroleum Resources DPR and Petroleum Product Pricing Regulatory agency PPPRA doing to ensure that the fuel is not diverted to other places?

These questions became necessary because it is confounding that a county’s whose daily consumption is put at 40 million litres and with a 30,000 metric tonnes cargo, which is equivalent of 40 million, discharging every day, the scarcity should have been over by now. But no, the queues are more pronounced and shortage in supply is all over the place. This shows one of three things: the agencies are not effective; the agencies do not have accurate data on fuel consumption in the country or some people are gaming the system and diverting the products meant for domestic consumption to other places or countries. Recently the NNPC said  that under normal circumstances only 200 trucks of  33,000 litres  is  usually pushed to the market but now it has been  increased to 300 and yet there scarcity persist. Giving a breakdown of the supply, the NNPC said 1,194 trucks of petrol were loaded nationwide last week Tuesday. Lagos got 467 trucks (15,411,000 litres); Abuja, 141 trucks (4,653,000 litres) and Kano 23 trucks of 759,000 litres. Others were Port Harcourt, 29 trucks (957,000 litres); Kaduna, 36 trucks (1,188,000 litres) while Ebonyi received four trucks of 132,000 litres. It behoves on the agencies and the NNPC to identify those responsible for this horrible situation of keeping Nigerian at the filling stations. Hapless citizens are tired of the government’s constant lamentations and apportioning of blames. If the government against all sound advises have resolved to firmly control the business of petrol importation and distribution, then it should not blame anyone but itself for the current scarcity in the country.

This brings us to the point we have been making and shouting ourselves hoarse over: government have no real choice than to deregulate the downstream sector of the petroleum industry. There is just no better way to end the recurrent scarcity and ensure uninterrupted supply all year round. The truth may not be convenient but it needs to be told. The NNPC and by extension, the government does not have the capacity to import and distribute fuel on a consistent basis across the country. The world over, it has been proven that governments are not particularly good at running businesses, and this is painfully too obvious in Nigeria.

We align ourselves with the position of the Lagos Chamber of Commerce and Industry (LCCI) which urged the government to totally deregulate and liberalise the downstream sector, get out of the business of fuel importation and restrict itself to the regulation of the sector just like what obtains in the telecoms sector. Like the Director General of the Chamber, Muda Yusuf avers, “we have major marketers, independent marketers, depot owners and so on, and these people can bring a lot of value…But because of the policy environment, there’s no breathing space for the private sector in the environment”.

It is very clear that government control of businesses is now anachronistic. What the NNPC and the Petroleum Ministry are doing now is that they are abandoning their more important jobs of policy formulation and regulation and are taking over the day to day business of petroleum importation and distribution – a task they neither have the skills nor capacity for. It is time the federal government stop impeding the growth and development of the downstream sector.