- We need a policy for local production
Nigeria’s failure or inability to refine petroleum products locally keeps haunting it. At least two news reports, last week, are pointers to this sad fact. The first was the disclosure by the Nigerian National Petroleum Corporation (NNPC) that we spent $5.8bn importing petroleum products last year. The second is the demand by the Major Oil Marketers Association of Nigeria (MOMAN) that the Federal Government must pay subsidy arrears if the persistent fuel scarcity is to be a thing of the past.
NNPC’s Group Managing Director, Maikanti Baru, made the disclosure of the amount it cost us to import fuel last year during a public hearing organised by the Senate Committee on Public Accounts at the National Assembly Complex in Abuja.
Baru, who was represented by the chief operating officer, (finance and accounts), Abdulrazaq Isiaka, said NNPC carried out the massive importation to fulfill its statutory role as supplier of last resort to ensure that Nigerians did not suffer as a result of product unavailability.
MOMAN, on its part, also asked the government to continue the subsidy regime in order to facilitate the importation of petrol to meet local demand. The group’s executive secretary, Mr Obafemi Olawore, told the Senate Committee on Public Accounts in Abuja on Tuesday last week, as part of the probe into the alleged illegal payment of subsidy by the NNPC, that government’s failure to pay the subsidy had incapacitated marketers from importing fuel.
It is sad, so sad that we are still importing fuel about three years after the Muhammadu Buhari administration came into being. We know that it is impossible for the government to have solved the fuel crisis completely by now, but then, we would have moved close to destination if it had enunciated a clear-cut policy on how to take the country there. It is only recently that it seems to be getting serious about the modular refineries that it promised. Even if that was what it has been pursuing, we would have made some progress, no matter how small, with regard to local refining of petroleum products.
The incessant fuel queues at our filling stations are the result of the fact that we still import the bulk of fuel consumed in the country. Of course, given the vagaries of the international oil market, the N145 per litre of fuel that the government fixed in 2016 when crude price was down to about $30 per barrel cannot stand at the over $60 per barrel that it is going for presently. But then, the government cannot announce further fuel price increase because of the political backlash. Fuel marketers who hitherto imported the bulk of the fuel have backed out because it is no longer profitable for them to continue importation and sell at the prevailing fixed price. Yet, the NNPC alone lacks the capacity to import our fuel needs.
MOMAN is lamenting non-payment of subsidy now apparently because the government is reluctant in paying because of the massive frauds associated with it in the past. Yet, what should have been done is to criminalise the subsidy thieves rather than subsidy because most economies have had cause to pay subsidy in one form or the other.
Yet, the government cannot continue playing the ostrich. It should put the subsidy on the table so that all Nigerians can see it and decide the way forward. That is far better than the present arrangement where the NNPC is doing it without subjecting it to legislative scrutiny.
In the long run, however, the government has to come up with a viable policy to ensure that we produce fuel locally. That is the only way to stop the perennial queues at our filling stations.
