The Presidency may have risen in stout defence of Oil Minister, Ibe Kachikwu over the vituperative aspersions cast on him by APC leader, Bola Tinubu, but let them be under no illusion that Nigerians have been mightily insulted and to say the nation is disappointed with the change-promising APC government over the perennial fuel crisis will be an understatement. Yes, Kachikwu is not a magician but it’s been over a year since he took office and the long queues at filling stations is an embarrassing spectacle that has gone on for too long. Unfortunately, there is no end in sight; rather, the government’s response has been to blame past administrations for their present failures. This raises fundamental questions over the managerial capabilities of those in charge, and vindicates criticisms that the APC was not prepared for governance. Nigeria’s continuous dependence on a corruption-ridden fuel importation regime is baffling, but that a major oil producing country has apparently refused to build and operate functional refineries preferring importation is most pathetic and disgraceful. Buhari must end this shame.
To the eternal embarrassment of the nation, and despite repeated assurances by the Nigerian National Petroleum Corporation (NNPC) that the scarcity was artificial, most petrol stations were shut down with no fuel to sell. The few that opened witnessed long queues of desperate motorists and citizens who needed fuel for their vehicles, motorcycles and generators. The government’s reaction typified by indecision and bureaucratic vacillation plus the avalanche of lies and promises unleashed to mollify the public instead precipitated a crisis of devastating proportions. The scenes were chaotic and shameful as crowds piled up at the stations where fuel was sold. Expectedly, fuel hawkers had a field day as black market thrived; racketeers ripped off desperate motorists who were willing to pay any price.
Premium Motor Spirit (Petrol) sold at between N130 and N200 a liter as against the official price of N86.50. The result was a hike in transport fares. Stranded commuters suffered untold hardship, and bemoaned the recurrent ugly situation, which showed no signs of abating as motorists waited endlessly to purchase fuel. Hawkers threw caution to the wind, selling petrol in residential areas and along major roads in the country. Meanwhile, the power sector is facing its lowest moments which has plunged the nation into suffocating darkness, as fuel scarcity denies domestic and commercial consumers from operating private power generators.
The official lie was that the fuel scarcity would end by the first week of April but it may take about four more weeks to get fuel into the country due to the long process of ordering petrol from refineries. This crisis was inevitable, when the NNPC, in a fit of bad judgment reduced the import allocation ratio of private companies from 60% to 22%. In that event, the NNPC was expected to import the entire balance in supply of petrol requirements for allocation to oil marketers for eventual distribution. Indeed, the NNPC even argued that this option would not only be profitable but also checkmate any hanky-panky by oil marketers over the volume of fuel imported.
That standpoint provoked widespread speculation in certain quarters that the NNPC was short-changing the oil marketers. And going by the recent fuel crisis, the decision was a bad miscalculation as NNPC failed to meet its obligation of fuel importation. This opened the window for private marketers to frustrate supplies at depots and filling stations in order to get a higher import allocation and ensure government cancels its price modulation mechanism and resumes subsidy payments.
However, the market fundamentals neither support a return to subsidy nor an upward review of prices at the pump. The NNPC is grappling with fresh challenges as its operational deficit rose to N24.23 billion in February, from N3.55 billion in January. Ultimately, the NNPC reversed course with a new allocation formula that reverts the bulk of importation to the private marketers in exchange for a commitment not to engage in sabotage and hoarding. The decision to give a greater allocation ratio back to private companies will allow NNPC to focus on the key task of building domestic fuel reserves.
This latest spell of petrol scarcity along with the immense socio-economic cost that it occasioned was certainly caused by poor judgment and official misconduct, marked by acute demonstration of lack of character and gross irresponsibility thereof, by NNPC officials. It is, therefore, not enough for the NNPC or Kachikwu to apologize to Nigerians: all officials who failed in their duty and precipitated the scarcity should be sanctioned. It is so unfortunate that fuel, rather than be a major part of the solution, has become part of the problems of Nigeria to be solved. There is administrative inefficiency at the highest level of the oil industry management. This must be corrected before any policy thrust can work.
Besides, the high degree of policy inconsistency also remains a major problem affecting the industry. The contradictions and confusion inherent in the downstream sector have remained intractable. The four existing refineries are still grossly underperforming below capacity. What then is happening to the huge allocation of crude to the NNPC? If this allocation is effectively refined and the products released, it should go a long way to meet local demand and reduce dependence on importation. Therefore, the oil allocation to the NNPC should be discontinued since it ends up being managed in ways that are far from satisfactory. The fact of the matter is that NNPC’s opaque management system can hardly be said to have changed under Kachikwu.
The NNPC symbolizes the endemic and systemic corruption that has become second nature to Nigeria. Because of the huge and varied opportunities the oil industry offers political leaders to lubricate the wheels of their extended patronage networks and fill their pockets, it would seem there is a deliberate ploy to keep the sector down. Over the years, successive administrations seemed to cash-in on the corruption in the sector to further their political and economic interests. Little surprise the PIB is on life support at the ICU (intensive care unit) in the National Assembly.
With all the machinery at the disposal of government and its agencies, all that is needed to make fuel available is good planning and transparency. Whether it is granting of licenses or the actual importation, proactive planning would ensure the availability of petrol and avoidance of embarrassment as well as the untold hardship visited on hapless Nigerians. The usual excuse by the NNPC that the scarcity is caused by panic buying is no longer acceptable. The country has had enough of the buck-passing.
Nigeria cannot afford to continue along this path of self-destruction. If the whole hue and cry about the change agenda will ever transcend the realm of cliché, one of the surest ways of doing that is to find a sustainable way of making fuel available to Nigerians. The starting point will be dealing decisively with the flip-flops of Nigeria as a foundation for regaining some measure of international credibility and restoring investors’ confidence in the oil industry and in Nigeria.
