Lingering fuel queues question NNPC capacity to fulfil import quota
Lingering fuel queues at filling stations in Lagos, Abuja and other major cities in Nigeria are questioning the capacity of the NNPC to fulfil its fuel import quota.
The Petroleum Products Pricing Regulatory Agency (PPPRA) this year, adjusted the fuel import allocation empowering NNPC to import 72 percent of fuel while private oil marketers are to make up for the 28 percent shortfall.
Folorunso Alake, former secretary-general, Independent Petroleum Marketers Association of Nigeria (IPMAN), Ibadan branch, has advised the government to encourage more importation of petrol into the country.
“NNPC is trying but the petrol imported is not enough and that is why we are moving from one depot to another looking for the product.”
However, sustained fuel queues at filling stations in the country have resulted in hike in fares, people keeping vigil at fuel stations in Lagos and other cities.
Meanwhile, Abuja Chamber of Commerce and Industry (ACCI) said with the rising pressure in non-availability of petrol, Micro Small Medium Enterprises (MSMEs) in the Federal Capital Territory (FCT) might have lost over N30 billion within 30 days.
Tony Ejinkonye, president of the Chamber, said in statement that: “Businesses, especially MSME’s have lost over N30 billion through inadequate supply of petroleum products. Labour productivity is low as employees have stayed off work since the hike of fares by providers and when they come, they are always late.”
According to Ejinkonye, NNPC banned the use of kegs to buy petrol without considering that most households and small businesses run on petrol generating sets. This has forced them to close shops. Buying with kegs is not the cause of scarcity but inadequate supply of products.
Meanwhile, analysts say even if independent marketers get a higher supply quota they will still be handicapped by scarcity of forex, which has seen NNPC import close to 100 percent, according to Ibe Kachikwu, minister of state for petroleum, hence they called for total deregulation.
Chambers Oyibo, former group managing director of NNPC, said, “the reason nobody has been able to set up refineries in Nigeria for the past 20 years is because they can’t sell at competitive prices.”
Obadiah Mailafia, former deputy governor of the Central Bank, said: “We need a free non-subsidised market for PMS. Government and private sector should be free actors in that market. Fair competition will make supply and demand to have a clearing price free of any chicanery.”
There are those who differ. Igwe Achese, national president, National Union of Petroleum and Natural Gas Workers (NUPENG), at the union’s meeting with President Muhammadu Buhari last week, advised the government to put in necessary policies that would adequately regulate the prices of petroleum products.
In the mean time, the NNPC says it is anchoring long-term solution to the problem on Direct Sale Direct Purchase (DSDP) arrangement for crude, which will commence first week in April.
Kachikwu told lawmakers in February that the DSDP option would eliminate all the cost elements of middlemen and empower the NNPC to take control of sale and purchase of the crude oil transaction with its partners.
“When I assumed duty as the GMD of NNPC, I met the Offshore Processing Arrangement (OPA) and like you know there is always room for improvement. My team and I came up with the DSDP initiative with the aim of throwing open the bidding process.
“This initiative has brought transparency into the crude-for-product exchange matrix and it is in tandem with global best practices,” he said.