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The looming fuel crisis
By Sun News Publishing
Wednesday, April 9, 2008
From indications, Nigerians may experience another petroleum
products scarcity of a prolonged nature. The recent revelations
that the Department of Petroleum Resources (DPR) has decided
to enforce the ethanol content level in the imported products,
is behind this apprehension.
It was reported in the press a few days ago that following
a new regime of enforced regulation on the quality of petroleum
products imported into the country, importers of the products
may have decided to hold back.
DPR, the oil and gas sector regulator, has said that henceforth,
petroleum products imported into the country must have no
more than five percent ethanol. Ethanol is a hydrocarbon substance
derived from sources other than from crude oil. It is a lower
form of fuel and cheaper to produce and could be added to
refined petroleum products. And because it is added to refined
fuel, it automatically reduces the purity and the quality
of fuel. However, that has not meant that it is advised to
entirely avoid it as fuel complement. Rather, regulation of
its content level in the product has become imperative. That
is even more so, considering that automobiles in Nigeria are
not conditioned to take above certain percentage level of
ethanol.
It is believed that Nigeria started using ethanol-added fuel
during the general Sani Abacha regime. Since then, there has
not been any conscious effort to check or regulate how much
of ethanol-bearing fuel that should be imported into the country.
In February this year, 14,000 metric tonnes of toxic fuel
went into circulation. The product was traced to Oando Plc
and it was discovered that the toxicity was as a result of
very high ethanol mix.
The problem now confronting the country is that major oil
marketers, the importers of petroleum products into the country,
have said, with the new regulation of five percent ethanol,
they will not be able to import and sell at the current price
regime.
DPR showed its resolve a few days ago when it intercepted
two ships coming into the country with the product containing
22 percent ethanol. Importers, under the aegis of major Oil
Marketers Association of Nigeria (MOMAN), insist that adhering
to the regulation would mean importing at a very high cost
since fuel with low ethanol costs more. At this instance,
according to them, they would be forced to sell at a price
higher than what is currently obtainable in the local market
in order to recoup their investment.
But the dilemma is that neither the government nor the Nigerian
people will be receptive to price hike. The Federal Government
has even made a singsong of it lately, that it is not contemplating
increasing the pump prices of petroleum products. And for
Nigerians, it has remained a very touchy issue. The marketers
are also insisting that even with the bridging cost, which
government pays them, they would still sell at a loss if they
import fuel with low-level ethanol as the new regulation provides.
The higher the ethanol in fuel, the cheaper the product. However,
the side effect could be quite devastating on motor engines
because of its low quality.
So now, there seems to be a stalemate. And meanwhile, the
available fuel, both at the deports and filling stations are
drying up. Queues have been surging at the stations in Lagos
area in the past two weeks. The Nigerian National Petroleum
Corporation (NNPC) had said that the queues were a result
of the long holiday occasioned by the Easter and Eid-El-Maulud
celebrations. But it is beginning to appear that there is
much more to it than the NNPC said.
As it now stands, we want both the government and the marketers
to break the stalemate. Certainly, Nigerians cannot and do
not, for whatever reason, want to go through the stress of
fuel scarcity any more. As everyone now knows, it is one of
the most terrible experiences a nation can be afflicted with.
Also, both parties should appreciate the position of Nigerians
in matters of fuel hike. Add these to the fact that inferior
or low quality fuel is the least the people would want to
accommodate; at least, now that the long existed “trade
secret” has been made open and which of course they
now understand to have been working against their interest
and that of the country.
We, therefore, implore the government and the marketers to
find mutual accommodation for their differing stances in the
interest of the people. Nigerians have remained haunted by
the ugly spectacle of petroleum products issues, especially
in the area of availability and price. It is time to end all
of this. Whatever the solution, the tripartite issues of price,
availability and quality must not be sacrificed.
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