- Beyond what Minister Kachikwu disclosed
With fuel queues refusing to disappear, there appears to be no end to rationalisations by the Nigerian National Petroleum Corporation (NNPC) on why the situation has persisted. Speaking in Lagos at a town hall meeting Monday last week, Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, told his audience that truckloads of petrol meant for Lagos and its environs were being diverted to neighbouring Cameroon and Chad.
“Over 30 per cent of (fuel) supply is diverted”, the minister reportedly told his audience. He added, “In the last five days, we have pumped 400 trucks of product into Lagos State. The total consumption (in the state) at the maximum is 250 trucks; most of those trucks are diverted from Lagos to the hinterland of Chad and Cameroon…We need, literally, a whole army to stop this from happening. So, I continue to supply and over-supply and so we struggle.”
Nigerians, just like the minister, must be exasperated that the measures aimed at tackling the problem have tended to come to naught. Except perhaps Lagos where there has been some noticeable improvements over the course of the last few days, overall, the situation has largely remained the same with major filling stations not having enough petrol to sell. The exception is the so-called independent filling stations mostly located outside the Lagos metropolis, which continue to get ample stock which they sell far above the recommended retail price.
It must be said that Nigerians now understand the issues far more than the minister will care to admit. As far as we can see, the main challenge remains one of getting enough supply of the product to go round. The issue of smuggling which the minister alluded to, is secondary, and is certainly not new; what the prolonged scarcity did was to exacerbate the problem. Even at that, the solution appears to us as simple as defining the situation as an emergency which requires not only ramping up supply (which is critical), but also ensuring at the same time that products are actually delivered to designated filling stations.
Contrary to the minister’s averment, we do not think that the situation requires a battalion of soldiers to solve. Indeed, this is hardly the time to whine and bemoan the situation but rather for the NNPC to sustain the current momentum. If only in the interim, a tracking mechanism – to be drawn up by the NNPC in collaboration with the Department of Petroleum Resources (DPR) – to monitor the movement of products has become inevitable, to curb corruption and to bring some sanity into the fuel distribution business. With mechanism in place, it should not be difficult to identify those behind the nefarious business of smuggling for appropriate sanctions.
Having said that, we couldn’t agree more with the minister that it is about time the private sector drives the business. The point has been made over and over again that the current business model for the downstream sector is not only outmoded but laden with corruption and rent. Now, more than ever before is the time to push more aggressively for the sector to be opened to the private sector to relieve the NNPC as indeed the treasury of the burden of fuel importation.
But even more importantly is the need to encourage on-going investments in new refineries to ensure their speedy completion. In the end, a truly liberalised downstream sector not only holds the key to eliminating most of the current distortions in the fuel supply and distribution chain, but also the scourge of smuggling.
