Return of fuel queues

The fuel scarcity that marred the yuletide celebrations returned again last weekend all over the country as motorists had to contend with long queues and struggle to buy petrol at the few stations dispensing the product. In most parts of the country except, perhaps, the city centres in Lagos and Abuja, fuel now sells for between N185 and N350 per litre in total disregard of the officially fixed price of N145 – the main reason for the scarcity anyway.

This new episode of fuel shortage has finally disproved the insinuation by the President during his New Year address that the scarcity was caused by sabotage and “manipulated blackmail”. His assurances that the “NNPC had taken measures to ensure availability at all depots” has also come to naught. Equally, the routine assurances of fuel availability and supply by the management of the NNPC anytime there is scarcity now sound hollow.

The truth, which both the president and the NNPC, have refused to come to terms with, is that as long as the government refuse to deregulate and liberalise the downstream sector of the economy and continues to fix the price of fuel in the country, the problem of perennial scarcity of fuel will continue to be our lot. It is a simple law of demand and supply. The government cannot control both price and supply of a commodity at the same time. Sadly, the refusal to liberalise the market has also affected investments in refineries.

Perhaps, the refusal of the government to liberalise the sector is unconnected with the government’s concern for the wellbeing of the masses, majority of whom are poor and would suffer untold hardships if the price of petrol continues to rise. But the government must equally consider the suffering this decision is causing the poor, which the government may be trying to protect. Most Nigerians now buy the product higher than they would have bought it at market price. Besides, it is clear to all that the NNPC has no capacity to solely import and meet the petrol demand of the Nigerian market, which means if the present situation continues, there will be more scarcity and Nigerians will continue to buy fuel at higher prices.

The long and permanent solution to the problem, as we have often state, is to simply deregulate the downstream sector of industry 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.

But there may be a more sinister consideration for the refusal to deregulate the sector. It may be the fear of losing the enormous patronage opportunities government control of the sector confers just like it happened in the telecoms sector. Perhaps, that is also the reason most Nigerian presidents still retain the portfolio of the Minister of Petroleum.

But the president needs to realise that his refusal to deregulate the industry is not helping poor Nigerians as he likes to assume, but feeding the highly corrupt, patrimonial and prebendal politics we are accustomed to playing in the country. Perhaps, the National Assembly and civil society needs to step in here to ensure that the right thing is done.