ENDING FUEL SCARCITY

 Kingsley Ndubueze Ayozie supports full deregulation of the  petroleum downstream sector

 The Nigerian populace woke up to behold the recent scarcity of petroleum motor spirit (PMS) popularly referred to as petrol. The fuel shortage as usual was characterised by long queues of vehicles and Jerrycans on our various streets across Lagos, Abuja, Port Harcourt and other metropolis resulting in panic buying at any point where the product was being dispensed. The Nigerian community viewed this recent development with missed feelings. The negative impact of reoccurring PMS scarcity both to us as individuals and the government at large is not palatable. As it stands currently, a litre of fuel is going well above the pump price of N1000 or so .The black market price is soaring above N1,500 per litre. This is sad and the attendants pain created by this is unbearable .

  The hike in the prices of petrol is gradually leading to high cost of transportation fares within our major metropolis which incidentally has started impacting negatively on the prices of food stuffs and services. Aside from the above negative impact, it is a known fact that our young entrepreneurs and SMEs depend greatly on PMS for daily survival or as an alternative source of power/ energy in order to run their business which certainly brings about job creation, poverty reduction and boost our economic growth. One thing we need to ascertain is that this occasioned scarcity is having a ripple effect or what the economist will refer to as negative externalities. In some quarters, a lot of questions have been raised especially in knowing why the NNPCL refineries are not working till date. Again, how come NNPCL or successive governments have not built new refineries? It is over 15 months now that President Ahmed Bola Tinubu announced the total removal of subsidy on petroleum products. After that pronouncement the masses had thought that the announcement would mark the exit of the issue of fuel scarcity within our domain. 

It is in the light of the resurfaced fuel scarcity that is championing the issue of liberalization of the oil sector as a possible remedial action in dealing decisively with this reoccurring decimal. Liberalization with recourse to the oil sector refers to the withdrawal of barriers alongside regulations which is targetted at boosting a healthy competition and further create an investment opportunity or destination. Within the oil sector, liberalization could take different shapes such as: price liberalization, trade liberalization, investment liberalization and more importantly, deregulation. Deregulation is the removal of government control over the oil industry in order to increase private sector involvement and further provide a healthy competition. It may also connotes the government’s total withdrawal from the pricing of petroleum products and further opening up the sector for investors to invest and actively participate in the going therein. In addition , it implies the selling of our crude to NNPC or any other company or private investor that is willing and interested in refining and making readily available the crude oil at the prevailing international price. Deregulation is viewed further as a means by which the government will convert pipelines and depots into common carrier firms for anyone who can foot their services to use. It is also a situation where any person who is willing and interested can bring into the country petroleum products subject to meeting specific benchmarks and paying the required tarriffs to the government quarters.

 This write up is focussing on the importance of liberalization in combating this re occuring fuel scarcity. Some of the possible gains liberalization offers to us as a people include the following: It will bring about an increase in competition and turn Nigeria into an investment destination; ensuring availability of petroleum products; eliminating the monopolistic power of NNPCL; allowing for more companies to enter the oil market and compete favourably; lower costs of operations in relation to the oil sector; assists to stimulate widespread economic activities thus eliminating the challenges for new entrants into the market.  It will promote healthy competition among fellow firms involved in the business; it will bring bring economic growth; stimulate innovations and creativity within the market; increase market growth and stability of products; do away with unnecessary business restrictions; stabilize domestic price of petroleum products; massively creating new employment opportunities in the refining, haulage and distribution of petroleum products. It will prevent the occasioned losses being witnessed in trying to subsidize oil or the losses incurred during importation of oil to make up for shortfall in internal consumption, and above all, it will possibly lower the prices for consumers at a future date, bring about wealth creation within the Nigerian market that will boost our GNP and per Capita Income in the long run. Of a truth, liberalization is an acceptable global phenomenon which any developing economy cannot joke with.

Therefore, there is a clarion call on the part of government to ensure that all our national refineries are back on track with maximum production capacity as all these measures will put a permanent end to the incessant scarcity being witnessed.

While we sincerely commend and also applaud the government for all the measures being put in place in order to stem the issue of petroleum scarcity, we want to employ our government to take such bold step that will make our age- long refinery to become fully operational. We are very optimistic that with the recent entry of Dangote Refinery into 

the oil market, we may likely be bidding farewell to this consistent issue of fuel scarcity.

 Sir Ayozie FCTI, FCA  is a Public Affairs Analyst