How Baru Raised the Bar in Fuel Availability at Yuletide

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The time was December 2015 and the venue, filling stations across towns and cities, the nook and crannies of the country. The stage was that of chaos, anarchy, commotion, stress, and absolute pandemonium. Motorists queuing up for hours—and even days—in long, snaky lanes leading up to filling stations, hoping and praying that by the time they get their chance at the pump, there will be something left for their tanks. The result was utter frustration, sheer condemnation and rains of abuses on the then six-month-old Buhari Administration, with many describing the new Government as insensitive towards the plight of Nigerians.

Now fast-forward 365 days, December 2016 to be specific. The stage is calm, serene, peaceful and tranquil. Roads leading up to filling stations are as free as air, with many of them almost deserted. In stretched intervals, one could see pockets of motorists getting into the filling stations with tremendous ease, comfort and effortlessness, filling their tanks in just a matter of seconds. As for the fuel attendants, one might think they are on vacation. The situation is that seamless and hassle-free. The outcome is, as expected, commendation, well-wishes and prayers for the President, who, according to them, did not make a mistake in choosing Dr. Maikanti Kacalla Baru as the best person to halt the recurrence of the December 2015 fuel crises.

Surely, those were two interesting scenarios. Without mincing further words, the two scenarios did not just occur by mere happenstance. While the first situation represents a recipe for chaos and total hopelessness, the second shows ease and absolute calmness. The difference between both situations is that someone somewhere was truly in charge and was actually discharging his duties silently and with all sense of responsibility, focus, commitment, foresight and sacrifice.

Checks within the Nigerian National Corporation (NNPC) and indeed the downstream sub-sector show that when Dr. Maikanti Kacalla Baru assumed duties in July 2016 as the Group Managing Director, one of the key tasks he met on ground was how to solve the perennial challenge of products supply and distribution in the country. Of course, vast experience on the job tells him that fuel availability is one of the key responsibilities of NNPC, one profound parameter upon which Nigerians appraise NNPC’s performance. There are other stakeholders within the petroleum downstream value-chain, but as far as ordinary Nigerians are concerned, NNPC is what they know.

It is in realization of this reality therefore that Dr. Baru did not relent. And from day one, he swung into action, cashing in on the modest gains made by the Federal Government’s deregulation policy of the downstream sector (which aimed at eliminating subsidy payments on petroleum products). In his usual hands-on style, Dr. Baru jumped into the front seat, driving the efforts right from his desk, right from his office within the NNPC Towers. He deployed what could better be termed as scientific and never-seen-before solutions, using properly sourced and diligently analyzed data to address the recurrent downstream logjam.

Utilising the result of the analyzed data, Dr. Baru began by holding fruitful engagements with relevant stakeholders within the petroleum downstream value-chain of the nation’s Oil and Gas Industry. From the Independent Petroleum Marketers Association of Nigeria (IPMAN), the Major Oil Marketers Association of Nigeria (MOMAN), to the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Dr. Baru’s key message was clear: let us all help eliminate the recurring decimal of long queues at filling stations nationwide, so that we all can benefit from a stabilized downstream subsector of the oil and gas industry for the benefit of all Nigerians.

In one of those numerous interfaces with IPMAN shortly after his appointment, Dr. Baru solicited the Association’s support towards ensuring efficient distribution of petroleum products nationwide particularly before, during and after the ember months. He also urged the association to use its vast network of distribution outlets in the downstream sector across the country to deliver petroleum products to the people so as to prevent the unwholesome occurrence of sharp practices such as round-tripping, hoarding and products diversion.

Dr. Baru did not only stop at that. He urged the IPMAN leadership to enforce the Petroleum Products Pricing Regulatory Agency’s (PPPRA) retail price band for all petroleum products across all its retail outlets. Most importantly, he enjoined the Association to take advantage of the liberalization policy of the downstream sector by the Federal government to import petroleum products so as to always keep the country wet with products.

Still in its role as the “big brother” of the nation’s oil and gas industry and in particular the downstream sub-sector, the NNPC kept its promise, deploying gilt-edged foresight, innovative thinking and brilliant new ideas towards achieving its targets in the sub-sector. Key among those initiatives include taking the giant step to ensure the sustainability of the over 40-day sufficiency up from the 27 days tradition for Premium Motor Spirit (PMS) popularly known as petrol or gasoline. That has been sustained by Dr. Baru since coming on board about six months ago.

It is also on record that under Dr. Baru’s watch, NNPC developed and operated a robust gasoline demand-supply model that provided accurate demand-supply forecast and enabled effective planning, data-backed decisions, logical execution and performance tracking of all gasoline supply portfolios in Nigeria. This exceptional effort has led to the establishment of a “decision threshold” for effective decision-making by Management of the Corporation 60 days prior to the depletion of new National gasoline reserve level of 40 days sufficiency.

Moreso, that outlook improved product supply and scheduling through timely discharge of products leading to reduced demurrage cost by 58% compared to 2015. It has also eliminated the economic costs of fuel scarcity which could affect up to 5% of the National GDP estimated at $5 billion. Aside improving forecast, operational transparency and effective monitoring, the NNPC under Dr. Baru has also improved efficiency in resources allocation and prioritization for sustainable supply and distribution of PMS across the nation.

Not only the PMS which is the ‘real deal’ for ordinary Nigerians, the NNPC helmsman ensured that adequate volumes of other petroleum products were constantly supplied and distributed to marketers to meet national demand. The result of all these laudable initiatives is what is there now for all to see. And that is the fact that throughout the beginning of this yuletide period, petroleum products shortage has been forestalled. Today, motorists drive in and out of filling stations with ease, all thanks to Dr. Baru’s vision, foresight and excellent collaboration with stakeholders.

A few weeks ago, following some reported hiccups in air travel which led to flight delays and cancellations across major airports in the country, NNPC as the big brother that it always is, also came to the rescue. To salvage the looming flight chaos, Dr. Baru ensured the Corporation intervention through its oil trading subsidiary (Duke Oil Ltd) flooded the market with Aviation Turbine Kerosene (ATK), also known as Jet A1. The development, which exceeded marketers’ demand, saw the importation of about 38.7million litres of aviation fuel, which represents about twenty six days sufficiency.

Specifically, on December 14, 2016, the Corporation completed the discharge of 8,800MT of ATK to key marketers’ terminals. In addition, as at December 19, 2016, 23,500MT which represents about 28.2million was discharged to other leading oil markers in the country. In order to sustain the tempo, the Corporation went a notch higher, securing the supply of additional 30,000MT vessel of ATK which represents about 36million litres expected to berth Nigerian shores before the beginning of the new year.

For the common man in Nigeria, life rotates within and around petroleum products availability. It is a fact that any hitch in fuel supply and distribution flow could cause a multiplier effect that will send serious ripples and shocks to the standard of living of Nigerians. But with all the aforementioned milestones and achievements of the NNPC in the downstream sub-sector under the able stewardship of Dr. Maikanti Baru, it is safe to say that fuel queues are on the verge of becoming a thing of the past. Even much safer is the great feeling that Scenario One depicted in this write-up will never be here with us again.
––Ajala, a Petroleum Economist and Downstream Expert, wrote in from Apapa, Lagos.