The return of endless wait for fuel Black marketers are back
Amidst spirited efforts of the Nigerian National Petroleum Corporation (NNPC) to check the twin problem of acute fuel scarcity and arbitrary price fixing, some stakeholders, who threw their weight behind the prosecution of indicted marketers in the fuel subsidy regime, last week challenged the Federal Government to bring back marketers with clean bill of health into the system in order to bridge the gap, report Festus Akanbi, Ndubuisi Francis and Chineme Okafor
Although it took the vandalisation of the Nigerian National Petroleum Corporation’s (NNPC) pipeline in Arepo, Ogun State sometime in August for the stark reality of a prolonged fuel scarcity to dawn on consumers in the south west area of the country, other parts of the country had been keeping vigil at fuel stations for quite some time this year.
According to an NNPC official, the pipeline at Arepo carries between 10 million and 11 million litres of fuel per day to Lagos and its environs and some part of the states in the North.
As long queues returned to fillings stations in virtually all parts of the country, indications emerged at the weekend that the disruptions in fuel distribution and the attendant hike in prices of the product might continue till next year.
A random survey conducted by THISDAY last week showed that many filling stations were without fuel while the few ones that opened for business sold fuel well above the recommended price. Not even the long queue of petroleum trucks that has continued to block the whole axis of Creek Road, Apapa, and Lagos has been able to make any difference.
An official of an independent oil marketing firm said that petrol scarcity might linger in Lagos for some time.
He alleged that the inability of marketers to import the product caused current scarcity. He said that the marketers could not import petrol because of government’s failure to settle subsidy claims of some marketers, disclosing that only one depot in Apapa was loading trucks with the product.
“Out of the more than 10 depots in the area, only one was loading trucks and the loading capacity is going down on a daily basis.
“Before 200 trucks were loading, but now hardly would 60 trucks load in a day,” he said.
The NNPC mega station in Ikoyi and some filling stations at Agege Motor Road were among those that had long queues of vehicles last week whereas Mobil filling station in Mushin, MRS at Isolo, Lagos and Akute area of Ogun State, Forte Oil at Ladipo, and Oando at Ikota were not dispensing fuel during THISDAY’s visit.
Meanwhile, the NNPC and Pipelines and Products Marketing Company (PPMC) are insisting that the lingering scarcity of Premium Motor Spirit (PMS), otherwise known as petrol, in the Federal Capital Territory (FCT), Abuja and some other parts of the country may not be due to a shortfall in supply earlier.
Acting Group General Manager, Group Public Affairs of the NNPC, Fidel Pepple, explained that the corporation was not lacking petroleum products to supply across the country but currently contends with challenges arising from illegal hoarding and diversion of petrol away from designated delivery points, by private petroleum marketers, a situation it said, had given rise to serious shortage of petrol in cities like Abuja. Expressing dismay at the emergence of queues at petrol stations mostly in the FCT, NNPC warned petroleum products marketers, requesting them to stop the inimical practice of products diversion and hoarding or made to go through the firm enforcing arm of the Department of Petroleum Resources (DPR).
“Going by the quantity of PMS that has been released by PPMC from the Kaduna refinery for distribution to Abuja, we are not supposed to have queues at all in any filling station. On Monday, 71 trucks of PMS were loaded from the refinery in Kaduna designated for Abuja, but the report we have shows that only 18 trucks arrived Abuja. On Tuesday, 45 trucks of PMS were loaded from Kaduna to Abuja, only 25 arrived. This clearly shows that some marketers are diverting the product thereby causing unnecessary hardship to Nigerians. All those found to be involved will be severely sanctioned,” NNPC said.
Some marketers are said to have devised a method of hoarding the product in order to make a quick profit.
Expectedly, the ensuing confusion has given rise to the return of black marketers who sell fuel at exorbitant prices.
They are found majorly on such roads as Ikorodu road, Lagos-Badagry expressway, Apapa-Oshodi expressway, Festac-Amuwo bypass and some streets in Festac and Satellite towns.
On the efforts being put in place to meet the emergency situation, Pepple, told THISDAY last week that the corporation has bridged the supplies from Atlas-cove and Apapa axis as well as other parts of the country to ensure that the scarcity is minimised.
“I want to assure Nigerians that NNPC has stepped up fuel supply to marketers and distributors for effective and efficient supply of fuel to Nigerians. As I speak, we have raised the daily supply of fuel from Folawiyo tank farm from 150 tankers to 250 tankers, MRS from 100 to 200 tankers, Capital Oil to 300 tankers, NIPCO to 70 tankers and AITEO to 100 tankers,” he said.
He explained that the NNPC has doubled its supplies to private depots used. When he was confronted with the reality that many of the fuel stations dispensing fuel do so at higher prices, Pepple said the corporation still sells to the marketers at discounted price, saying he doesn’t understand why marketers are selling at higher rates to end users.
Assuring Nigerians of the corporation’s capacity to meet the demand, Pepple said, “We have products but the only snag is the distribution outlets because of the attack on Arepo line and that is why we increased the number of trucks we use for distribution in the interim.”
He said there shouldn’t be any reason for hoarding fuel, adding that the Petroleum Products Marketing Company (PPMC) has commenced the monitoring of the activity of marketers who got supplies.
The NPPC spokesperson said it has been difficult to put Arepo line back because of the present security challenges, saying the NNPC is not going to send any of its engineers to the area unless their safety is guaranteed.
But the Manager, Public Affairs and External Relations of PPMC, Mr. Nasir Imodagbe told THISDAY that the situation will soon ease off with the imminent resumption of work at the 2B pipeline network at Arepo, Ogun State, which was recently vandalised by armed bandits. He however, did not give specific details as to when the situation will normalise.
Imodagbe, who also stated that the country has 32-days sufficiency of petroleum products, identified the corrupt practices of diversion by marketers as a major challenge inhibiting distribution of products across Nigeria.
“This is a serious challenge to us at PPMC because right now, our staff have been committed to monitoring the movement of products from the depots to their final destinations; the marketers are not helping matters in this case. It is so bad to see them engage in diversion of products; it appears they are always out to take advantage of every situation to perpetrate their acts as the sallah holiday is just around the corner.
“As at Monday, October 15, we loaded 71 trailers from Kaduna refineries to Abuja but only 18 trucks came into Abuja. On Tuesday, 16th, we sent out 45 and only 25 came in; that is a bad situation and we are working to correct that.
“I can assure you that all these will soon end as soon we get the security clearance from the police to move in to rectify the system 2B at Arepo. All we are waiting for now is the security clearance and all this will cease. I can also confirm that there are concerted efforts to rectify that vandalised pipeline from the police who have been doing their work there and the corporation,” he said.
Marketers Boxed to a Corner
However, General Secretary, Independent Petrol Marketers Association of Nigeria (IPMAN), Mr. Mike Osatuyi, said the problem of fuel scarcity as it is today is more entrenched and that the current effort of the NNPC cannot address the situation alone.
The IPMAN scribe, who gave kudos to the NNPC for doubling its efforts to make things work, however said apart from the vandalisation of pipeline in Arepo, the withdrawal of some marketers from fuel import and distribution has also worsened the situation.
He maintained that the marketers, who also own tank farms, accounted for 40 percent of total fuel import, saying it is obvious that NNPC cannot do it alone.
“The fact is that if 40 percent of the supply is taken out, there is definitely going to be a supply gap.”
Osatuyi said the decision of the aggrieved marketers became inevitable following the refusal of banks to fund their activities since according to him, the failure of the federal government to make the outstanding subsidy payment has frustrated efforts of the marketers to honour their past obligations to banks.
On the new pricing regime adopted by the marketers who sell fuel, the IPMAN scribe said the development is just a reflection of the law of demand and supply.
“When supply cannot meet up with the demand, the price will automatically go up. Unless the private sector gap is bridged, the scarcity and the upward price adjustment will continue,” he said.
Osatuyi said, although he did not support a regime of indiscriminate hike in prices of fuel, the decision of some depot owners to sell fuel at a rate above N87 per litre which is the official price, has compelled the marketers to add to the price of the product.
He disclosed that the Department of Petroleum Resources (DPR) last week closed some depots for selling above the official price.
He maintained that the only way to end the current trend is for the government to enter into dialogue with the marketers. He support any effort by the government to make the marketers account for the subsidy payment they received from government, but advised such shouldn’t be done in a way to cause hardship to the people.
The Chairman of the National Union of Petroleum and Natural Gas Workers (NUPENG), Lagos Zone, Tokunbo Korodo said tanker drivers were doing their best by lifting the product promptly, but that the demand could not be met due to the shortage of the product at depots.
He said: “The tanker drivers are therefore anxiously waiting for a quick resolution by the Federal Government, because this is not what they bargained for.”
Korodo attributed the scarcity to the differences between the Federal Government and the marketers, and the vandalised pipeline at Arepo community in Ogun State.
He said: “Some of the indicted marketers are not willing to import due to the subsidy saga. You can imagine a situation where a depot that loads up to 200 trucks per day now loads about 40, that is a huge shortfall and it will definitely affect the market.”
Pressures had been mounted on the federal government in July for the speedy payment of all outstanding subsidy to fuel marketers who claimed to have supply fuel to Nigerians.
In 2012, a sum of N888 billion was set aside for the payment of fuel subsidy claims including for some outstanding payment for 2011, however, about N900 billion is set aside for subsidy payment in the 2013 budget.
However, government alleged the current spate of crisis in oil importation and distribution were being orchestrated by some oil marketers indicted by Presidential Committee on Fuel Subsidy Payments headed by Mr. Aigboje Aig-Imoukhuede.
Some marketers listed in the scam included Alminnur Resources Limited, Brilla Energy Limited, Caades Oil and Gas Limited, Capital Oil and Gas Industry Limited, Conoil Plc, Downstream Energy Source Limited and Eterna Plc.
Also included are Euraafric Oil and Gas Limited, Lumen Skies Limited, Majope Investment Limited, Matrix Energy Limited, Menon Oil and Gas Limited, Mob International Services and M.R.S. Oil and Gas Limited, Nasaman Oil Services Limited, Natacel Petroleum Limited, Ocean Energy Trading and Services, Pinnacle Contractors Limited, Sifax Oil and Gas Company, Tonique Oil Services Limited and Top Oil and Gas Development Company Limited.
A statement issued by the Ministry of Finance said “The position of the Federal Government on fuel subsidy payments is clear. We will do our best to encourage honest efforts by genuine companies engaged in fuel importation but we will not fall for the cheap blackmail of indicted marketers who are using all kinds of subterfuge to escape sanctions.
“We know that Nigerians are fully in support of this position because the money belongs to all Nigerians and it is important that the correct steps are taken to protect the public interest. We would also like to stress that marketers with legitimate and unencumbered claims have been paid and will continue to be paid…” the statement added.
According to the statement, between April and May 2012, Batches D/12 and E/12 involving 14 oil marketers with a claim of N17 billion were fully settled.
“In addition, since early July 2012, N25.6 billion worth of claims has been fully settled. In all, between April and August this year, in respect of 2012 PMS claims, N42.666 billion have been paid to 31 oil marketers.
“These are incontrovertible facts which confirm government’s commitment to ensuring that issues concerning genuine marketers with legitimate claims are dealt with expeditiously,” the statement said.