Only private sector involvement can stop fuel scarcity – LCCI

The Lagos Chamber of Commerce and Industry (LCCI) has accused the government of being responsible for the perennial fuel scarcity which is gradually bringing   the economy to its knees.

The body has also asked the administration to stop impeding growth and development of the downstream sector through unnecessary direct interference.

It urged  government to further  get out of the business of fuel importation by deregulating and liberalising the downstream sector, so that private players can be allowed in, while government restricts itself to regulation.

Muda Yusuf, director-general of Lagos Chamber of Commerce and Industry, speaking on Channels TV Sunrise Daily programme, attributed the problem of the petroleum downstream sector to government’s insistence on playing a dominant role in importing and distributing fuel.

“The way out of this is to disconnect the government completely from this sector, so that the government can play a regulatory role, just as we have in telecoms.  Solving a problem like this needs to be private sector driven. What has happened is that the whole issue around the downstream has been built around the public sector, particularly around the NNPC and how much can the NNPC do?

“We have the major marketers, independent marketers, depot owners and so on, and these people can bring a lot of value to this place. But because of the policy environment, there’s no breathing space for the private sector in the environment.”

Yusuf stated that sanity has been restored to the sale of diesel in Nigeria because government has disconnected itself from it.  “When was the last time you saw a queue for diesel? This is because government has disconnected itself from sale of diesel.”  He insisted that the current model is not sustainable and that only a few Nigerians are benefiting from it.

“Well, there are advantages in this current system to those who are profiting from the arbitrage and rent opportunities but not for the Nigerian people. Nigerians are paying much more than they would pay and if we had a system that was properly balanced, more jobs would have been created.  If we had a model that allowed the private sector to get involved, they would have been using their funds to bring in the products.

“They could have set up refineries by now. But they won’t set up refineries if you are going to dictate price to them. That is why people are carrying licenses here and there but they are not setting up refineries. “

Experts have also been calling on the Federal Government to focus on key issues of governance, rather than meddle with fuel importation.

The effect of government’s meddling in running a modern system with outdated ideas has resulted to lingering fuel queues, policy somersaults and the chaos in the petroleum industry.

Tony Ejinkonye, president of the Abuja Chamber of Commerce and Industry (ACCI) has said the current fuel scarcity is taking a toll on Micro Small Medium Enterprises, (MSMEs) in the Federal Capital Territory, (FCT) and they may have lost over N30bn within 30 days, due to lingering fuel scarcity.

The LCCI has also called for a clearer definition of the role of the Nigerian National Petroleum Corporation, as well as a level playing ground for all operators, in a release to media outlets.

LCCI believes this would also attract more investment, generate more jobs and reduce the pressure on the country’s foreign reserves.

The chamber also suggested that the pipelines should be given out on concession to private investors for more efficient management.    

It further urged the Central Bank of Nigeria (CBN) to ensure more transparent processes in the allocation of foreign exchange to petroleum product marketers and ensure the payment of mature letters of credit to their offshore fuel suppliers.         

Meanwhile, the NNPC said as part of its continued efforts to keep Nigerians abreast of the key actions taken in the downstream petroleum sector, it is re-assuring Nigerians that it is on top of the petroleum products supply and distribution situation, and remains committed to eliminating this endemic issue once and for all within the next few days.

According to Garba Deen Muhammad, group general manager, public Affairs, NNPC,  monitoring has been intensified to ensure full compliance with approved prices and that violators of approved prices and hoarding of petroleum products will attract penalties which include: giving out of petroleum products free to the public, sealing-up fuel of stations found to be hoarding petroleum products and payment of a fine and withdrawal of   Marketer’s License.

Olusola Bello & Isaac Anyaogu