When fuel queues began to appear in certain parts of the country a couple of weeks ago, Nigerians were made to believe that it was a localised problem brought about by a minor hiccup in the affected areas. The people were also given the assurance that there was no cause for alarm because the country had sufficient fuel in its strategic reserve. The queues, however, got longer while the shortage of the product spread rapidly to other parts of the country. As usual in such situations, rarity became a source of enhanced value. The shortage resulted in an increase in fuel price and a disproportionate rise in the prices of essential goods and services.
Different reasons have been adduced for this round of fuel crisis. Officials of the Nigerian National Petroleum Corporation (NNPC) have been labouring to convince the public that the problem was due to no fault of theirs. They have attributed it to disruption of the pipeline networks to their depots. They have blamed it on fuel marketers who were said to be hoarding the commodity in anticipation of a rumoured price increase.
There have also been the allegation that marketers are diverting the product to unauthorised locations. The corporation has, however, not told Nigerians how many of its depots were affected by these disruptions, why the scarcity has been country-wide and how long it will take to fix the disrupted pipelines. And if the scarcity is due to an expected increase in fuel price, why has the persistent dismissal of the rumour not normalised the situation? On its part, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has laid the blame at the door of the Federal Government which, it said, had failed to clear outstanding subsidy claims owed its members for almost nine months. Another major reason given by this group of marketers for the problem is that the NNPC is now solely responsible for the supply of the country’s fuel needs.
The resurgence of fuel queues after about three years’ respite has put in bold relief the fact that there has been no positive change in the management of Nigeria’s oil wealth. One interesting feature of the present fuel crisis is the altercation that has been going on between the principal players in the oil industry – the NNPC and the independent marketers. One glaring fact is that they all constitute the source of the agony which Nigerians have been experiencing. They have collectively been wreaking havoc on the economy and inflicting pains on the populace. The marketers have been cheating fuel buyers by manipulating their pumps while the agencies put in place to oversee their operations and protect the people’s interests look the other way. The revelations unearthed by the House of Representatives’ probe of the subsidy regime also provide ample illustration of the unfathomable corruption in the industry.
The allegation that the marketers have been hoarding fuel in anticipation of a price increase serves as a clear evidence of the rot in the oil industry. If the marketers have not been making immoral profits from such abuse and getting away with it, they would not have seen it as a legitimate approach to business. This practice, like the fuel subsidy issue, shows the extent to which people at critical levels of authority have been operating in cahoots with the different players in the industry to make oil a curse for the vast majority of Nigerians. That the minister has had to constitute committees to monitor fuel distribution from NNPC depots to filling stations is an indication of the morass into which the Nigerian oil industry has degenerated. The reported payment of N41 billion subsidy arrears to 27 oil marketers is gratifying as it will again ensure that all hands are on deck in the business of fuel importation and distribution. The pertinent question, however, is : why was the payment delayed till there was a major disruption of fuel supply? Again, why has the government allowed a situation in which fuel supply to the entire country is left to an organization – the NNPC – that is well known for incompetence and corruption?
Nigeria has the unenviable distinction of being the only major oil producer and exporter which does not have the refining capacity to meet its own requirements of refined petroleum products. The country’s four refineries, which are being maintained at exorbitant costs, have been producing far below their installed capacity as a result of willful mismanagement. This is happening in a world in which non-oil producing countries have functioning refineries. It is unfortunate that Nigeria’s successive administrations have complacently stuck to importation as the only feasible approach to fuel supply in spite of its obvious economic disadvantages. It is also shameful that the business of importation is being deliberately bungled for the benefit of a self-serving clique. It is high time the government came up with an implementable action plan that will reverse this ugly trend and serve the people’s interests. Fuel shortage in a country that produces 2.5 millions barrels of crude oil a day should be an embarrassment to the government.
