Government should be courageous enough to deregulate the downstream sector

At a period the federal government and organised labour were meeting to determine how deregulation of the downstream petrol sector should be implemented, long queues of vehicles have resurfaced at most filling stations across the country. The development cannot be described as unexpected. Regardless of all the claims about ‘deregulation’ by the federal government, it is not as if we made any remarkable progress in the management of our downstream petroleum sector vis-à-vis arresting cyclical petrol scarcity and long queues of vehicles. We only glossed over a crisis and moved on expecting some miracles to happen down the line. As we predicted on this page last year, with the jump in the price of crude that has resulted in higher prices for refined products, we are now back to Ground Zero.

As a newspaper, we believe that full deregulation of the downstream sector of the petroleum industry is beneficial to everyday Nigerian. But we want this to be done with clarity, not in a deceptive manner. It is for this reason that we find the reappearance of fuel queues on our streets very appalling.

Consistently, the government has told Nigerians of its dire financial situation which means that it will be unable to maintain subsidy on fuel. It is also noteworthy that the government did not make provisions for subsidy in its latest budget. With that, the logical thing to do would have been to find an economic solution which full deregulation offers. So why are there no clear efforts in this direction? Why is the so-called deregulation tempered by price fixing which is antithetical to what the Nigerian National Petroleum Corporation (NNPC) is preaching?

It is simply unfair to Nigerians to get treated the way this government and previous governments have done on issues of petrol supply and pricing. We cannot emphasise enough the fact that an oil producing country should have no business with scarcity of refined petroleum products. To have this consistently go on is to conclude that we have poorly equipped managers running our national life and their decisions are hurting all of us.

In its usual style of public communication especially on oil-related business, and one which has failed to recognise that people now have real-time oil price movements in their palms, the NNPC has tried to explain away the reasons for the resurgent queues. The corporation is heaping all the blame for the scarcity on oil marketers who are being accused of hoarding petroleum products. The NNPC also claims that there is availability of fuel in the country. But rather cleverly, the NNPC has refused to tell Nigerians that it is the sole importer of fuel in a supposedly deregulated sector. Rather than point fingers, therefore, if anyone at all should be blamed for a breakdown in product supply, it is the NNPC.

The corporation has also not told the country that with increase in the price of crude oil, it is expected that the pump price of refined products will correspondingly increase and that this is even more so when all other factors involved in the importation and distribution of petrol – lightering expenses, marine transport average and other administrative charges amongst others – are considered. Like we have previously advanced, we believe that a full deregulation of the country’s downstream petroleum sector is the only solution to the cyclical fuel scarcity that has come to define Nigeria’s oil industry.

All parties – government, organised labour, marketers, NNPC and Nigerians – must realise that while the best time to do this was yesterday, the next best time is now.