Scarcity of products hurts economy
Passengers stranded as airlines cancel flights
Queues lengthen at stations, agony mounts
FORTY-NINE days after President Goodluck Jonathan on January 16, 2012 slashed the pump price of petrol from N140 to N97 per litre under the partial deregulation of the downstream sector, the scarcity of the product yesterday spread across the country.
The situation was the same in the aviation industry, which was almost paralysed by the scarcity of Jet A1 (aviation fuel).
Passengers, who rushed to the airports for trips within and outside the country on Monday and yesterday, were stranded as most of the airlines cancelled virtually all their scheduled flights.
Sadly enough for the motorists and air travellers, especially in Lagos, the Federal Government’s agencies, which regulate the industry and marketers, sang discordant tunes on the development.
Except for the Nigerian National Petroleum Corporation (NNPC), which blamed the scarcity on the Nigerian Customs Service (NCS) and the Nigerian Navy (NN), the Pipeline Products Marketing Company (PPMC) and Petroleum Products Pricing Regulatory Agency (PPMC) assured that the situation was under control. But they admitted that there was a decline in the national stock.
As expected, the development has caused pains for Nigerians as fares have gone up and passengers stranded at the bus stops and motor parks in some major cities.
Following the mass action that greeted the government’s raise of the price of petrol from N65 to N140 per litre on January 1, 2012, Jonathan after a series of negotiation with organised Labour reduced the rate to N97 on January 16, 2012. He also announced remedies and further inaugurated the Christopher Kolade’s Subsidy Reinvestment and Empowerment Programme (SURE-P) to implement the palliatives to ameliorate the hardship the policy might caused Nigerians.
When The Guardian visited some filling stations in Lagos and other cities yesterday, most of them were shut while the few that opened had no petrol to dispense.
The long queues, which had vanished at outlets, had reappeared, stretching to the roads and streets around the few outlets that had the product to sell.
Also yesterday, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, said the government would vigorously pursue the building of the proposed three new refineries to meet local demand by 2017.
Alison-Maduekwe stated this in Abuja when she inaugurated the Kalu Idika Kalu-led National Refineries Special Task Force.
The minister asked the panel charged with the responsibility of working towards the total stoppage of petroleum products importation by 2017 to harness the capacity of the local refineries to achieve the goal.
Kalu said the committee’s immediate target would be to achieve meeting local consumption of refined products.
He also hinted that the task-force would review licences issued to private concerns and determine their viability.
He stressed that there can’t be any excuse for Nigeria not to have at least 10 refineries and modular ones considering its huge petrochemical endowments.
In the aviation sector, several flights were cancelled, as airlines rescheduled operations only to identify profitable routes, due to assessed low stock of Jet A1 (aviation fuel).
The NNPC Group General Manager for Public Affairs, Dr. Levi Ajuonuma, explained in Abuja yesterday that some of the activities of the NCS and the Navy at the ports were responsible for the shortfall in fuel supply and the emergence of queues at stations in some cities across the country, especially in the Lagos area.
Ajuonuma claimed that several vessels laden with products, which ought to discharge them, had been detained at the Apapa Port for three weeks by the NCS and Navy thereby causing a hitch in the supply chain.
But officials of the PPMC and the PPPRA have affirmed grave situation in respect of national fuel stock.
It was learnt that the scarcity allegedly stemmed from the partial subsidy removal on petrol as lending institutions had blocked credit lines for some marketers, on account of “reduced incentives.”
Also, some marketers are allegedly reluctant to continue with the fuel import business on assessed lower returns on investment.
The marketers, who rely on credit from banks to import products, because of the fear of the unknown over the ongoing fuel subsidy probe, have reportedly retracted on the business they have classified as “high risk.”
A marketer told The Guardian that they were not sure if the payment of subsidy would continue, and could therefore not proceed to import petrol under uncertainty condition.
At the Ejigbo Depot in Lagos, which is operated by the NNPC, officials confirmed the rationing of products, citing insufficient importation.
Another marketer alleged that the banks were no more lending to fuel importers.
He also stated that the international policy on crude oil prices had affected importation as the prices were on the high side.
The Airline Operators of Nigeria (AON) through its Assistant Secretary-General, Alhaji Mohammed Tukur, urged the government to wade into the matter.
Tukur however ruled out debts owed oil marketers as reason for the crisis, adding that airlines were offsetting the bills. He further said marketers now supply aviation fuel to airlines on cash basis.
Tukur noted that the problem manifested last week Friday, leading to rescheduling of flights and in worst-case scenario, outright cancellations.
On Monday, virtually all the airlines cancelled their flights while a few others rescheduled them. The operators equally selected “high yield routes” to fly.
Passengers who had been checked in were shocked when they were told of long flight delays and cancellations.
The announcements from airline officials led to confusion at the airports.
At the Murtala Muhammed Airport 2 (MMA2), it was rowdy, as travellers sought to know which airline was going to their destinations. It was the same at the General Aviation Terminal (GAT), Lagos, where passengers expressed disappointment with the situation.
The PPPRA has however assured oil marketers that it had not stopped processing subsidy claims from genuine importers.
The agency’s Executive Secretary, Reginald Stanley, noted that PPPRA had completed the processing of all claims for 2011.
He announced that the mid quarter performance review of Premium Motor Spirit (PMS) showed 27 per cent achievement by marketers.
The PPMC also allayed fears of fuel scarcity as it declared that there was enough fuel in strategic reserve to last for more than a month.
Its Managing Director, Haruna Momoh, said that all the issues that led to the initial hitch in supply had been resolved.
“There were a number of issues like the Petrol Tanker Drivers (PTD) strike in Kwara, Rivers and Edo states, which have been resolved.
“There was also the issue of marketers’ reluctance to import products as a result of the uncertainty about subsidy payment, which has also been resolved with the recent appropriation for subsidy included in the 2012 budget by the President.”
Ajuonuma explained that one of the ships detained by the Customs was alleged to have contravened the rule three years ago when it brought petroleum products into the country without a temporary import permit.
The NNPC spokesman clarified that though the corporation was not against the Customs and the Navy carrying out their duties, he insisted that execution of such functions must be done without obstructing the smooth discharge of products.
Motorists in Osogbo, the Osun State capital and other major towns were yesterday confronted with acute scarcity of petrol.
It was first noticed Monday morning when long queues appeared at filling stations.
Most of the private outlets closed their premises and turned back motorists who thronged them to buy fuel.
Those who were lucky to get the product bought a litre at N120 above the pump price of N97.