Fuel scarcity, the blame, the truth, and the way forward.
By Idongesit Koffi
Premium Motor Spirit (PMS) popularly known as petrol plays a significant role in the Nigerian terrain. Its importance in the domestic, commercial, and industrial space justifies its place as the commanding height of the nation with economic activities often reacting to volatility and shocks in its pump price. Recently, PMS scarcity with its consequent price hike has triggered reactions from several quarters. This comes a year after the Buhari led Government reviewed upwardly the price from N97 to N145 per liter to take full benefit of subsidy removal. However, with recent events in the domestic market coupled with the traditional buck passing attitude of the melo-dramatic stakeholders, many question remains unanswered with citizens akimbo. In view to providing perspective to concerns raised by the citizens, the blame is on -
• “The fuel scarcity witnessed across the country is due to the inability of the Direct Sales, Direct Purchase (DSDP) partners of NNPC to deliver on their business obligation and as such, there are no products in our tanks” The Depot and Petroleum Products Marketers Association (DAPPMA).
• “NNPC has supplied appreciable volume of petroleum products to the Depot and Petroleum Products Marketers Association (DAPPMA), Major Oil Marketers Association of Nigeria (MOMAN) and Independent Petroleum Marketers Association of Nigeria (IPMAN)” NNPC spokesman, Mr Ndu Ughamadu.
• “The weather - Cold harmattan periods has led to increased purchase of petrol, thus scarcity” Nigeria’s Minister of Information and Culture, Lai Mohammed.
• “The ploy by Federal Government to increase the price of petrol is responsible for the scarcity”… Mr Fayose.
• “The queues at filling stations are a result of panic buying by consumers and so Marketers, in their quest to cash in on the situation hoards fuel”… Other Government officials.
As Government and relevant Stake holders continue to buck pass, the truth remains that scarcity exist, a clear indication that demand outweighs available supply thus the resultant price hike occasioned by the product shortage of which onus lies with the Government Oil Corporation, NNPC the sole importer of the product. This confirms (DAPPMA) position that fuel scarcity across the country is a result of the inability of the Direct Sales, Direct Purchase (DSDP) partners of NNPC to deliver on their business obligations.
Mr. Kachikwu while making a presentation to the Joint Committee on Petroleum (Downstream) outlined three potential solution to the perennial petrol scarcity to include; First, a flexible tax-waiver to accommodate the extra cost elements in the fuel pricing template. This will reap some tax element off the shoulders of marketers who import the product at the prevailing market price of N171 or dispense at government approved rate to customers. Second, introduction of an exchange rate modulation programme to enable private marketers participate and access foreign exchange at a subsidized rate, a move which is inefficient and dangerous to the Nation as it makes no sense to subsidize consumption rather than production and third, price plurality regimes to allow marketers sell at a price higher than that of NNPC.
Though not a perfect script, the Kachikwu led committee initiative is worth commending and for its prayers to fly, participation by private importers who possess the way wither is imperative. A committee comprising of relevant Government institution such as CBN, Finance Ministry, Marketers and Petroleum Product Pricing Regulating Agency (PPPRA) must be set up to monitor and meet periodically to review progress and track setbacks. The outcome of such reviews must be made available to the public domain and their activities completely havened from the manipulative and circumventive influence of politicians.
Note: This reflects the thoughts of the author made with no ulterior or interior motives and not on behalf of any organization.