29 November 2015, Lagos – The scarcity of Premium Motor Spirit (PMS), commonly known as petrol, which started last month in same parts of the country has worsened as the product, at the weekend, was being sold for between N150 and N200 per litre, instead of the official pump price of N87, depending on the area. The scarcity affected transport fares in Lagos which went up.
In the metropolis, many service outlets were out of petrol, leaving people to patronise jerry can-carrying black market dealers along the road. Whereas some mega stations sold at N100 per litre with long queues causing so much traffic on the expressway, smaller filling stations sold at N150 per litre and black market N200.
At Agric-area of Ikorodu, the product was sold for N150 per litre. Along Ajah axis, after Lekki second toll gate, many stations were under lock and key and black market dealers were seen displaying fuel in Jerry-cans on the road. At Osapa-London round about, beside Chicken Republic, near Jakande, along Ajah road, Lekki, there was a miled drama, as a heated argument ensued between a commercial bus driver and a driver in Toyota Camry, who struggled to buy petrol from a black market dealer.
Around Ojodu-Ikeja, many stations were out of product and transport fare from Ojodu Berger to Ikeja increased from N100 to N150 as a result of the development. Similarly, at Ojota bus stop, transport fare from Ojota to Oshodi by mini-buses, otherwise known as Danfo, went up from N150 to N200, leaving many people standing on the queue for Tata buses. Also, a large number of passengers were seen on queue waiting for BRT buses at Ojota.
A former National President, Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr. Tunji Adeniji, spoke, in an interview with Sunday Vanguard, on the petrol scarcity.
What is fundamentally wrong with the downstream sector of the economy that the nation keeps experiencing recurring scarcity of petrol, which is a product needed in almost every house hold?
Well, scarcity of petrol in Nigeria has become a recurring problem because as a nation we have refused the do the right thing, by addressing pertinent issues surrounding the downstream petroleum sector of our economy. In fact, there are a lot of problems militating against effective supply of petroleum products in the country. For example, when you look at the sector critically, you would realise that our policies are not right, therefore, we are bound to face some challenges. Going beyond the issue of wrong policies, there is problem of inappropriate pricing system, which is also a major challenge.
Can you give us insight into what you mean by inappropriate pricing and how that affects supply of petroleum products across the country?
Inappropriate pricing in this context implies not giving the right pricing for the products, in a way that can improve the margin of oil marketers to stay afloat in business. This is quite imperative because once we don’t give appropriate pricing for the products, the refineries would not function well in the country. The economic implication of this is that, people would not enjoy good supply of products in the country, and the moment the products supply chain is not efficient to meet the increasing demand, there is abound to be scarcity in the system.
Some stakeholders in the sectors are speaking strongly against continuous importation of petroleum products by Nigerian government. Do you share similar sentiment?
As an oil producing nation, Nigeria ought not to be importing refined petroleum products into the country. Also, we suppose not to experience recurring scarcity of petrol, if our government had address the issues of inappropriate pricing system, if oil marketers are paid subsidy claims as at when due and if other challenges facing the sector had been addressed.
Aside from oil marketers who are private sector players, the Nigerian National Petroleum Corporation (NNPC) has the mandate to import products. How come fuel scarcity is still persisting?
The reason we are suffering this lingering scarcity of fuel is because only NNPC is importing the product now. In reality, the NNPC system has collapsed, but the private sector players like the oil marketers are those assisting NNPC to bring in the product for domestic and industrial consumption. From the scarcity situation we are experiencing in the country now, it is quite clear that only NNPC cannot meet the demand for petrol consumption with a large population of over 160million people.
As a stakeholder in the sector, can you tell us exactly why fuel scarcity, which started last month, is worsening by the day despite Federal Government’s intervention and recent approval of N413billion to be paid to oil marketers, as outstanding subsidy claims?
At this point, we must be frank with ourselves. You see, in Nigeria, money approved is not the same as money released.
How do you mean?
This is because in our system when you say that government has approved money does not mean that the money has been paid immediately to those it is meant for. So, that money government approved for payment of outstanding subsidy claims that people are talking about has gone into supplementary budget in the National Assembly. Therefore, the money has not been paid to marketers yet. And until that money is released and oil marketers are paid the outstanding subsidy claims, fuel scarcity would persist, because marketers need the money to settle their debts with the commercial banks, for them to be able to bring in more products.
Since marketers who import products into the country have agreement with government on the method of transaction. Why do we always have issues of accumulation of huge subsidy claims and marketers not being paid as at when due.
Ordinarily, outstanding subsidy claims ought to be paid to marketers within 45 days after importation. But I can tell you that since March 2015, no marketer has been paid subsidy claims.
What is the way out?
The way forward is for us to do the right thing. Like I said earlier, our policies are not right. Those polices should be reviewed with a view to enhancing efficiency in the downstream sector. We need the right and appropriate pricing system for the petroleum products. Deregulation is equally important and government should look at that as well. Even if government cannot deregulate the sector immediately, let us have appropriate pricing system now and government should ensure that marketers are paid subsidy claims on time.