As Nigerians still groan under the high prices of fuel amid continued scarcity, OLUGBENGA SALAMI examines the new efforts of the executive and legislature in alleviating their sufferings by ensuring they get the product with ease and at official pump price across the country.
“My brother, Otukpo is tight. It is N150 per litre of fuel here. I may leave my car here and travel back to Abuja by public transport. It is that bad”, that was a telephone message from a colleague who had travelled to the Benue State town for a wedding ceremony over the weekend.
The current high price of petrol and its scarcity in many parts of the country has been attributed to nonpayment of subsidy to marketers. Though the approval being awaited by President Muhammadu Buhari from the Senate on supplementary budget to offset the outstanding subsidy payments, has been granted, the situation is yet to be totally brought under control.
Due to nonpayment of subsidy claims, many marketers refused to sell the product and this has left the Nigerian National Petroleum Corporation, NNPC to the responsibility of supplying it, particularly petrol to all parts of the country.
The decision of the fuel marketers to stop supplying the product was due to the fact that the federal government might suddenly remove subsidy on the product. The recent announcement of zero budgeting formats for the 2016 budget is seen as an attempt to increase the price of fuel.
In 2000, former President Olusegun Obasanjo increased the price of fuel from N11 to N20 per litre, and later that year further increased it to N22. In 2001, the price went up to N26 per litre, and to N40 in 2003 after which it moved again to N45 per litre in 2004 and N70 in 2007. The late President Umaru Musa Yar’Adua upon resumption of office in 2007 reversed the fuel price from N70 to N65 per litre, before it was later increased again to N141 by former President Goodluck Jonathan in 2012.
Jonathan had attempted to remove the subsidy in January 2012, but the decision was greeted by nationwide protest by the organized labour unions.
The hardship being faced by Nigerians in getting the product forced the Senate to issue two week ultimatum to the Minister of Petroleum, the position being occupied by President Buhari to end the scarcity. Chairman, Senate Committee on Petroleum (Downstream), Senator Uche Lilian Ekwunife (PDP Anambra Central), gave the ultimatum 10 days ago during the committee’s meeting with top officials of the Ministry of Petroleum Resources at the National Assembly in Abuja.
Senator Ekwunife’s order came on the heels of disclosure by the Managing Director, Pipeline Products Marketing Company, PPMC, Mrs. Esther Nnamdi-Ogbue that Nigeria has lost 531 million litres of fuel worth N50 billion in the last 10 months to petroleum pipelines vandalisation in some parts of the country. She insisted that the Petroleum Minister with the cooperation of the permanent secretary and heads of agencies under the ministry, must not only end the scarcity within the stipulated time, but ensure that the premium motor spirit, PMS, otherwise known as petrol in particular, was sold to the public at the government’s controlled price of N87 per litre.
“We are mandating the Minister of Petroleum Resources, the Permanent Secretary and heads of agencies to stop this fuel scarcity in two weeks.
“We are giving a target now, we don’t wan’t to know how you would achieve it, but it must be stopped. This is a critical period, in the next few weeks, there will be Christmas, Nigerians want to see an end to this scarcity and be able to buy petrol at N87 per litre”, she said.
Senator Ekwunife, who commended the efforts of PPMC in putting an end to the scarcity, however, maintained that “what Nigerians wanted is getting fuel being sold to them at every filling station across the country”.
Earlier, the PPMC boss, Mrs Esther Nnamdi-Ogbue, told the committee that the major problem disrupting fuel distribution in the country was vandalization of the oil pipelines by criminals. She noted that Nigeria lost about 531 million liters of petrol, valued at N50 billion to the activities of vandals, between January and September 2015.
The managing director also fingered sharp practices at the fuel depots, including illegal charges and diversion of the products by marketers, saying these were some of the factors that provoked the scarcity and discrepancies in the prices in various part of the country.
For long, experts have argued that the subsidy scheme does not benefit the ordinary Nigerians. It is hard to see any petrol station, including some claimed to be owned by the NNPC, where the product is sold at the official price of N87 per litre across the country. The latest statistics by the National Bureau of Statistics, NBS revealed that petrol is sold between N100 and N150 per litre in many parts of the country. This of course may not capture some parts in the South-South where the oil is being produced and South-East regions where people buy at higher prices.
Apart from the issue of subsidy, many Nigerians believe that passage of the Petroleum Industry Bill, PIB by the National Assembly, would go a long way to put an end to the incessant fuel scarcity in the country. Senate President, Dr. Abubakar Bukola Saraki, agreed with this when he said passage of the Bill remains the solution to incessant scarcity of petroleum products in the country.
The bill is seeking to restructure the regulatory and commercial institutions in the petroleum industry, change the fiscal dynamics and reform the operational mechanisms of the upstream, downstream and natural gas industries. But over the years, the bill has not been able to pass through legislative process in the National Assembly due to politics and power plays from influential politicians and oil majors.
Saraki, while ruling on a motion, “The current fuel scarcity all around the country and the need to urgently resolve the crisis”, by Senator Barau I. Jibrin (APC Kano North) and co-sponsored by 23 other lawmakers, recently, however, assured that the 8th Senate under his leadership would ensure that the bill is passed for the reorganisation of the petroleum sector.
The senate president, who noted that a law regulating the petroleum industry, would help the industry to function effectively, said the legislature was ready to work harmoniously with the executive arm of government to find a lasting solution to the scarcity. He therefore directed the Senate Committee on Petroleum Downstream to look into the current scarcity and submit its report within two weeks.
The upper legislative chamber therefore mandated its Committee on Petroleum Downstream to urgently examine all issues associated with the scarcity of the petroleum products and submit its report within a week.
Similarly, it urged the Nigerian National Petroleum Corporation, NNPC and other stakeholders to continue with their push to stem the tide of present scarcity, while commending President Buhari for his commitment to resolving the intractable issues of fuel supply and distribution.
Senator Jibrin, while presenting the motion, noted that the scarcity of petroleum products in major cities and towns around the country in recent weeks had been inflicting serious hardship on the citizens, who now pay higher prices for them, especially petrol.
According to him, “the current situation is not in tune with the desire of the current progressively inclined government to bring succour to Nigerians in all spheres of their lives”. He recalled that fuel scarcity has continued to remain as a recurring problem in the country, and stressed the need to put an end to it in line with the change mantra of the present administration.
Indeed, President Buhari needs to boost his public image by fulfilling his electoral promises to Nigerians. As argued by many experts, he has to remove subsidy on petroleum products and used the money saved to provide critical infrastructure that would improve the living standards of the populace. The experts noted that subsidy sheme has deprived previous administrations the funds to do the needful for Nigerians across the country.
The present administration is also expected to privatise the nation’s refineries rather than allow NNPC to continue to waste scarce resources trying to revamp them. It would be recalled that the former President Obasanjo administration had in 2007 sold the nation’s four refineries to Blue Star Consortium, owned by a group of private sector investors led by the President of Dangote Group, Alhaji Aliko Dangote and the chairman of Zenon Oil, Mr. Femi Otedola.
The consortium paid $561million and $160million respectively for the Port-Harcourt and Kaduna refineries, but the administration of late President Yar’Adua reversed the sale of the refineries due to the public outcry then. It is however, the high time the Buhari administration privatises the refineries and attract more investments in private refineries in the country.