Fuel scarcity: Policy change not apology

On Christmas Eve, President Muhammadu Buhari finally spoke on the biting fuel crisis that hit the country in form of an apology. In a statement personally signed by him and posted on his twitter handle, @Mbuhari #FuelScarcity, he said: “I am being regularly briefed, especially on the Nigerian National Petroleum Corporation (NNPC’s) interventions to ensure that there is enough petrol available during this period and beyond. The fuel scarcity being experienced nationwide is regrettable. I sympathize with all Nigerians on having to endure needless fuel queues…” He said he had the NNPC’s assurance that the situation would improve significantly over the following days “as new shipments and supplies are distributed across the country.” He rounded up by informing Nigerians that he has directed the regulators to step up their surveillance and bring an end to heading and price inflation by marketers.
An apology is good but what Nigerians need most is a change in policy that will ensure uninterrupted supply and distribution of fuel all year round without the embarrassing episodes of fuel scarcity and long queues at the filling stations almost every other year. The government must be bold now to deregulate and liberalise the downstream sector. The current situation where only the NNPC imports petrol into the country is unacceptable. The sad reality the government and the NNPC are reluctant to admit is that the NNPC and by extension, the government does not have the capacity to import and distribute fuel on a consistent basis across the country. Governments, the world over, are not particularly suited to running businesses. That function is better performed by the private sector. The real functions of government are provision of order, security, infrastructure and an enabling environment. Coincidentally, the Nigerian government often fails in its duties and is rather desperate to perform the duties it is not created to and cannot perform.

Last year, the government announced the removal of subsidy from petrol and increased the pump price to N145. Unfortunately however, it refused to deregulate and continued to maintain a firm grip over the sector. Therefore, after the exchange rate crisis and the deregulation of the naira, other marketers could no longer import the product and the NNPC became the sole importer of petrol into the country. Sadly, it has reintroduced subsidy (27 Naira per litre) even when there was no provision for subsidy in the budget.

We continue to reiterate that the solution to the problem is simple and obvious. The government must deregulate the sector and 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. The job can be better performed by major marketers, independent marketers, depot owners and so on. They need a favourable policy environment to operate maximally.
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.