• Thursday, November 30, 2023
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Dirty fuel scandal, fuel scarcity, who is responsible?

On the move: Examining the success story of Lagos State transportation system

Nigeria may currently be the largest producer of crude oil in Africa, yet its capacity to manage the industry is questionable; as events in recent years have proven.

From 1958, when the first oil field came on stream producing 5,100bpd, Nigeria has built four refineries with a combined 445,000 barrels per day and ran them down; established a state-owned and controlled oil company that knows how to declare profits annually without producing any refined oil.

Meanwhile, records indicate that the country has 37 billion proven oil reserves but grapples with the world’s highest poverty rate and persistent fuel scarcity.

Nigeria’s oil economic misfortune is self-inflicted and can only be addressed by a commitment to proper management of resources and holding managers accountable.

The cost of remediation will be huge and the country’s lean resources may not be able to afford it. In one report it was estimated that the NNPC would need to expend as much as N201 billion to clean 179.25 million litres of fuel

For nearly one month, Nigerians have been subjected to an agonising petrol scarcity, which the NNPC admitted it was partly responsible for and its partners. While the oil company keeps promising the crisis will soon be over, it has taken over a month to fulfill that promise and that is not good enough. Though going by the latest observations, the situation appears to be abating.

NNPC may have apologised for the dirty fuel scandal that caused millions of Nigerians untold hardship and even managed to resupply the market, thereby easing the scarcity, but the company has yet to say what it plans to do to those responsible for the scandal nor has it taken any action against anyone. The NNPC also said the owners of damaged vehicles would be duly compensated but had not stated when the process would commence.

The cost of remediation will be huge and the country’s lean resources may not be able to afford it. In one report it was estimated that the NNPC would need to expend as much as N201 billion to clean 179.25 million litres of fuel. Experts even say it is a conservative estimate as there were other costs that would be associated with the reblending.

Unsurprisingly, the National Assembly says it is investigating the scandal but going by antecedents, not many Nigerians expect proper actions to be taken. But we believe it is critical to find those responsible and publicly make them pay a price that will deter a recurrence. This is one scandal too many for the regulator of the oil sector and should not be swept under the carpet.

Read also: Fuel scarcity grounds businesses, Nigerians pay more

It is equally important for Nigerians to be properly informed whether the price of petrol has been increased, as many consumers in states outside Lagos continue to buy the product at prices higher than the official N165 per litre.

Abdul Salihu Egele, the Edo State chairman, Benin Depot of the Independent Petroleum Marketers Association of Nigeria (IPMAN), said on Monday, March 7, 2022, that instead of the regulated official price of N148.17 per litre his members buy it from private tank owners, the price now goes between N170 and N180, hence, the only way independent marketers can break even is to sell above the government-approved price of N165 per litre.

The private tank owners may have acted on a new move by the NNPC. The company introduced a surcharge of N500,000 Ship-to-Ship Coordination Charge for each transshipment operation for petrol involving the NNPC Marine Logistics. This made depot owners to raise the ex-depot price of petrol, a development that has forced marketers to increase the petrol price above the approved cost of N142-N145 per litre.

According to reports, the N500,000 was part of moves by the NNPC to fully recover its operational costs since the recently passed Petroleum Industry Act (PIA) had made the national oil firm a limited liability company.

The move is particularly perplexing for a company under a government that has washed its hands off removing petrol subsidy for the remaining part of the year. Did the NNPC not calculate the cost of its actions?

The PIA is meant to make accountability culture in the oil sector by clearly allocating functions and ensuring that the rule of law prevails, but without implementation, this will not be achieved and it will continue to be business as usual in the sector. We therefore seek concrete explanations on this new development within the oil industry.

And at the risk of sounding repetitive, the unscrupulous elements who were responsible for the importation of the dirty fuel should be brought to book soonest. We are waiting and watching.