It is regrettable that despite the repeated assurances of adequate stocks and the persistent denials of a plan by the government to increase the pump price of premium motor spirit (PMS), the country has continued to witness a lingering shortage of the product, resulting in long and harrowing queues at filling stations and untold hardship for citizens.
The crisis was apparently timed to perfection, fuelling a conspiracy theory of desperate fuel racketeering to make gains from the expected upsurge in demand for petrol at the yuletide. It has, indeed, become an annual affair to have fuel shortages at festive seasons, probably to yield maximum gains for the racketeers.
This pattern has become all too familiar now and that is why the ongoing blame game, rather than ameliorate the problem, would make an already very bad situation worse. The problem is complicated and the fuel crisis, despite repeated assurances and deadlines of an end to it, is likely to persist for much longer. The possibility that this scarcity will stretch into the New Year is the real bad news. It is the reason there must be an immediate change of tactics to address the crisis.
As has become obvious, the Nigerian National Petroleum Corporation (NNPC), which has solely been engaged in the importation of refined petrol for some time now, did not anticipate the usual end-of-year festivities fuel racket and the need to stockpile enough products to counter the racketeers’ machinations. A few weeks to Christmas, it was obvious that something was afoot and that a fuel crisis was being contrived, when a very important union in the distribution chain decided to go on strike on a matter that was already being resolved and when the NNPC and its allies in the supply and distribution chain started giving conflicting figures on actual stockpiles, the products in transit and whether the pump price would go up or not.
Even now, the dangerous gambit is still on, making genuine stakeholders to wonder if the endgame is not to increase the pump price of petrol. That may well be the case, considering that the landing price of petrol now, according to official sources, is N171. What this means is that independent marketers will not be able to participate in the importation of the PMS, since the government-regulated pump price is N145 per litre.
This has left the NNPC as the sole importer for several months now and bearing a subsidy of over N20 per litre for all the fuel imported in the intervening period. This is a fact that the government has been reluctant to admit, in the light of its no-subsidy policy when the pump price for petrol went up to N145 in 2015. So, it will be unnecessary now debating whether it is the NNPC, as Vice President Yemi Osibajo submitted, or the Federal Government, that is bearing the subsidy.
What matters at this point is the need for a clear policy going forward and its implications for the economy and the polity in general. If government was consistent with its no-subsidy policy, the pump price of petrol would have long gone up. But, there is the difficult problem of whether the ordinary man can afford a further increase in the pump price and its overall implications for the economy.
We believe that it will be cheaper for now, for government and its relevant agency, the NNPC, to continue bearing the subsidy cost on behalf of the people and the economy, while working on increasing our local refining capacity as a long term solution. Our four refineries must be made to work at optimum capacity while new ones are built. If the four refineries were working at optimum capacity, the need to always import products would be greatly reduced. Their capacity, with the right political will, can be increased in about three years to completely meet the local petroleum products demand and obliterate the need to import the product.
Until this is done, we are subject to the vagaries of the international oil market with its attendant negative effects on our lives and the economy. The way to go is to build our local refining capacity to its optimum so that we do not need to be subject to the volatility of international oil prices, and we can do away with the oil marketing racketeers making huge fortunes from the citizens’ travails.
