Two weeks of what is now turning into a huge embarrassment to Nigeria, long fuel queues across the country’s petrol stations are proving that the situation is defying solutions being profered by government.
Nigeria, Africa’s largest economy by GDP, has experienced recurring fuel shortages over several years, with its refineries comatose and having to rely on importation.
Experts say proper privatisation and deregulation of the downstream of the petroleum sector would have gone a long way to solve the problem of constant fuel shortages.
They add that if the various attempts in the past to privatise the refineries had been successful, Nigerians would perhaps not be experiencing this ugly situation.
Adekunle Yunusa, of Oil and Gas Analysts, said the best way out of this problem is outright sale of the refineries because they have become problems to the country.
The administration of former President Olusegun Obasanjo approved the sale of the refineries but the late President Umaru Yar’Adua in 2007 reversed the decision for lack of alleged transparency in the process. Since then, the downstream of the petroleum sector has gone from bad to worse, with the country spending stupendously on fuel subsidies.
President Goodluck Jonathan in November 2012 recommended that the refineries should be sold due to inadequate financing and under-performance. This necessitated Diezani Alison –Madueke, the immediate past Minister of Petroleum Resources, to announce to the whole world in London, that the country’s four refineries had be slated for privatisation in the first quarter of 2014.
Also, the Bureau for Public Enterprises (BPE) had said that the privatisation plans were on at the preliminary stage, where the blueprint of the policy was to be decided and that it was working with the NNPC and Ministry of Petroleum Resources on the privatisation of the four refineries, but the process was truncated.
But the process of privatising the refineries is often scuttled by the NNPC officials who see the assets as belonging to the organisation, and not to the nation, hence their tendency to hold on to the assets and unnecessarily prolong any rehabilitation on the refineries, so as to discourage intending investors, some industry stakeholders said.
Even the current government has been infested with the bug of not wanting to free the downstream of the petroleum industry, as it has refused to take the opportunities presented by the current low price of crude oil to deregulate the sector but has rather chosen to be imported fuel even the refineries are grossly insufficient, the stakeholders added.
Eddy Wikina, managing director of Treasure Petroleum Resources, said the government should sell off the refineries and deregulate the downstream sector.
Meanwhile, the ongoing fuel scarcity across the country may linger till the end of March . This is because the supply gap already created is not likely to be bridged until oil marketers with permits to import take delivery of the products to augment supply from the Nigerian National Petroleum Corporation (NNPC) through the Pipelines and Products Marketing Company (PPMC) its subsidiary .
The NNPC/PPMC currently supplies 78 per cent of the nation’s 40 million litres daily consumption, while the oil marketing companies supply the 22 per cent shortfall. The current slip in supply was caused by difficulties which the oil companies encountered in getting foreign exchange to import.
Industry sources say some of the fuel depots that typically load an average of 150 trucks a day, cannot load more than 40 trucks currently. Some companies which service about 120 dealers a day can only service 20 now.
The ex-depot price for a litre of petrol has jumped to N103 as against N77 per litre in some depots at Apapa in Lagos, a source told BusinessDAY.
Olusola Bello & Isaac Anyaogu
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