Avoidable fuel scarcity – Guardian

Last week’s round of fuel scarcity, the first since the January 2012 fuel subsidy protests, could have been avoided if the Petroleum Products Pricing Regulatory Agency (PPPRA) had done right and released quarter one allocation of fuel to importers on time. Though the scarcity has largely eased off, that the procedure for allocating fuel is still jagged, despite Nigeria’s massive dependence on imported fuel, is baffling and questions the managerial capabilities of those in charge. Of course, it can only be gross mismanagement coupled with corrupt practices that breeds this needless scarcity.

Unfortunately, a major crude oil producer and exporter that, apparently, has refused to build and operate functional refineries but prefers importation can only be described as sick. Therefore, there may be no end to the frequent episodes of fuel scarcity so long as availability of the product depends on the corruption-ridden importation regime.

The scarcity, which started in Abuja FCT the other week, quickly spread to Lagos and across many states. Despite the assurances given by the PPPRA and the Nigerian National Petroleum Corporation (NNPC) that the scarcity was artificial and caused by panic buying, most petrol stations shut down with no fuel to sell. The few that opened witnessed long queues of desperate motorists and citizens who needed fuel for their vehicles, motorcycles, tricycles and generators. The scenes were chaotic and shameful as crowds piled up at the stations where fuel was sold.

Expectedly, marketers used the opportunity to rip off desperate motorists who were willing to pay any price. Petrol sold at between N120 and N150 a litre as against the official price of N97. Stranded passengers, of course, bemoaned the recurrent ugly situation.

Fuel hawkers had a field day as black market thrived.  Ten litres of fuel that normally sells for N970 sold for N2000. The result was a hike in transport fares and motorists and commuters suffered untold hardship.

Perennial fuel scarcity is a disgrace to a nation like Nigeria. Without getting things right in the first place, all the contentious talk of subsidy can only make things worse for the people.

There is administrative inefficiency at the highest level of the oil industry management. This must be corrected before any policy thrust can work. The contradictions and confusion inherent in the downstream sector have remained intractable.

The four existing refineries are grossly underperforming at a mere 20 per cent capacity. What then is happening to the huge allocation of crude oil to the NNPC? If this allocation is effectively refined and the products released, it should go a long way to meet local demand and there would be less dependence on importation. But the NNPC’s opaque management system can hardly be helpful to the country. Otherwise, the oil allocation to the corporation should be discontinued since it ends up being managed in ways that are far from being satisfactory.

Unfortunately, the fuel subsidy probes remain inconclusive and the treasury continues to bleed. With all the machinery at the disposal of government and its agencies, all that is needed to make fuel available is good planning and transparency.  Whether it is granting of licence or the actual importation, planning ahead would ensure the availability of the product and avoidance of embarrassment as well as untold hardship. The usual excuses by the NNPC that fuel is available or that the scarcity is caused by panic buying are unacceptable. Enough of buck-passing. More of best practices.

 

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