A Review of the Nigerian Energy Industry

Fuel Scarcity: Govt plotting petrol price hike, NLC, APC allege

NLC12 March 2014, Lagos – The main labour union and the main opposition political party yesterday accused the Federal Government of conspiring with oil marketers to increase petrol prices.

In separate statements Tuesday, the Nigerian Labour Congress (NLC) and the All Progressives Congress (APC) said the petrol scarcity being experienced around the country was part of a plot to make raising fuel prices a fait accompli.

Long petrol queues have persisted for several weeks in major cities and towns around the country, forcing prices to shoot up in filling stations and black markets.

Government has repeatedly assured that the fuel crisis would end soon because the scarcity is artificial, created by marketers who wanted to make a fast buck.

But in a communiqué after a meeting of its central working committee in Abuja yesterday, NLC said there was a plot to increase petrol price and that this would be resisted.

“The CWC condemned the present nationwide fuel shortage, describing it as a cruel conspiracy between the government and the marketers to impose hardship and trauma on the poor and hapless Nigerians with a view to ostensibly increasing fuel prices,” said the communiqué, signed by the congress’s president Abdulwaheed Omar and secretary Chris Uyot.

“Any attempt to further engender hardship on the working people through increase in fuel prices will be resisted by the labour movement.

“Accordingly, the CWC called on government to stop this subterfuge and take all necessary action immediately to restore full and uninterrupted supply of petroleum products to consumers across the country.”

For its part, the APC said government was “acting out a clandestine script to increase fuel prices through the back door,” and that the current petrol scarcity “may have been induced to make higher fuel prices a fait accompli for Nigerians.”

In a statement in Lagos, the party’s spokesman Lai Mohammed said fact that the scarcity has persisted despite the claims by government and oil marketers smacked of deception.

“The more fuel trucks the government claims to have sent to major cities to ease the scarcity, the more difficult it is for Nigerians to obtain the product. This is an old trick and Nigerians should not be hoodwinked into believing there will be no increase in fuel prices. The only deterrent is to let the government know Nigerians will resist any price hike,” he said.

The statement said the Federal Government is targeting raising petrol price to N120 per litre from the current official price of N97 per litre.

At present, many fuel stations are selling at up to N130 per litre. At the black markets in Abuja, price per litre is about N200.

APC said government’s plan is to make the argument that only higher prices would guarantee availability and that marketers would need sustainable profit margins to be able to continue supplying.

“We urge Nigerians not to swallow this bait,” Mohammed said.

Diezani: No price hike

But Petroleum Minister Diezani Alison-Madueke yesterday said there would be no petrol price increase, and that the current crisis would be over in a week when government “flood(s) the country with fuel.”

Speaking on the sidelines of a budget hearing by a House of Representatives committee in Abuja, the minister said: “There was also some strange rumour that the ministry of petroleum resources was going to announce an increase in the pump price of petrol which also helped to instigate some of the hoarding and some of the diversion. I have said categorically that we have no plans to increase the pump price of petrol anytime in the near future.”

Mrs. Alison-Madueke said her ministry was looking into the causes of the scarcity to bring it to an end, and that already the situation “has been taken under control in areas like Lagos.”

“The issues of supplies, more and more PMS (petrol) is being brought in and over the next week or so we will flood the country with PMS,” she said.

The minister insisted that the scarcity was caused by “some supply hitch”, hoarding and diversion of petrol by some marketers.

“There is some supply hitch which we are looking into; there is also diversion which was quite clear. There was an element of hoarding as well,” she said.

Chairman of the House Committee on Petroleum (Downstream), Rep Muraina Ajibola (PDP, Oyo), had earlier asked the minister to bring the petrol scarcity to an end.

“Go back to that magic that you did in the past and ensure that Nigerians have PMS flowing. This is something that you did in the past, and we want you to do same now to make life better for Nigerians,” he said.

Why there is scarcity – Marketers

Meanwhile, the Independent Petroleum Marketers Association of Nigeria (IPMAN) yesterday explained that the shortage in petrol supply is caused by the stoppage of import by most private marketers because they were owed subsidy payments.

IPMAN President Abdulkadir Aminu said in Abuja that the Federal Government’s failure to pay marketers for subsidy on petrol imported in the third and fourth quarters of 2013 forced most marketers to stop importing, leaving the Nigerian National Petroleum Corporation (NNPC) and a few others supplying.

Addressing journalists after a meeting of the association’s national executive, Aminu said the scarcity will continue until the Federal Ministry of Finance begins payment of the subsidy backlog.

“NNPC by the design of PPRA template only supplies 50% of the product into the country. The rest of us, the marketers augment the rest of the 50%. If NNPC can continue to supply because they are part of government, marketers cannot because of our limitations of our liquidity,” he said.

He added: “I want to reveal to all of you here today that it is only that 50 per cent of NNPC product that is in circulation. They have stepped up their supply, trying to do what every stakeholder is doing but it is evidently clear that they cannot do it alone.

“I therefore use this medium to appeal to the minister of finance as a matter of urgency to intervene and pay marketers accordingly so that the augmentation of this shortfall can be achieved in a short while and this scarcity will be a thing of the past.”

He said only 60 per cent of third quarter subsidy claims has been paid, while nothing has been paid for the fourth quarter.

“I am aware that there are some companies with a large heart and they are still importing. We have NIPCO still importing in Apapa and they have brought in their Q3, Q4 and 50 per cent, their Q1 but they cannot continue,” he said.

Aminu said that the accusation of product diversion against marketers makes no meaning as all diversions are legal so long as the products are consumed within the country.

“There is no diversion that is taking place that is illegal. All are legal diversion. If you make product available to Abuja and you have not made product available to Kano, Kaduna and Nasarawa, what do you expect? For them to come to queue in Abuja?”

– Francis Okeke, Musa Abdullahi Krishi, Balarabe Alkassim, Ibrahim Kabiru Sule and Daniel Adugbo, Daily Trust

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