By Steve Obodo
What started last week in parts of Nigeria as a minor problem has gradually spread to other parts of Nigeria as a national problem. From an average of N580-N630, which Premium Motor Spirit (PMS), otherwise known as fuel, was sold in different parts of Nigeria, the price has risen to N1000 at many filling stations nationwide. Black market price has gone up to between N1,500-N1800. This has led to hitherto forgotten long queues to resurface and virgils in places where PMS is in supply in some parts of the country like Lagos, Abuja, Ogun, Niger, Gombe, and more.
Expectedly, transport fares have gone up in the country as many filling stations remain shut, with motorists paying twice in some cases, which has added to the hardship being experienced in recent times. Disturbing reports and videos of stranded Nigerians trekking to work, their daily businesses and schools have resurfaced in the media. The fuel scarcity also coincided with the resumption of public schools in some states of the federation, adding to the burden on parents, teachers and school owners. As miscreants threaten to burn down filling stations of those perceived to be hoarding petroleum, many people are now asking: What’s going on? Is the pump price of PMS about to go up or is the case of hoarding? Surprisingly, the answers to these questions lie elsewhere.
On Monday, the Nigerian National Petroleum Company Limited (NNPC) offloaded 240 million litres of PMS, in Lagos, the country’s commercial capital, in a bid to tackle the worsening nationwide petrol scarcity. The imported 240 million litres of petrol came in through five vessels, and were offloaded into five depots. Early this week, filling stations in Lagos with fuel supplies started selling at an average of N800 per litre in various locations as the NNPCL began taking delivery.
Engineer Lukeman Cardoso, the NMDPRA Regional Coordinator for Southwest, Cardoso, has assured the agency was doing its best to ensure Nigerians were not exploited by filling stations. It is working round the clock with the NNPC, the supplier of last resort, to ensure they supply the entire populace. Following the removal of subsidy by President Bola Tinubu on May 29, 2023, he said the NMDPRA could no longer regulate the price of petroleum, as it is now based on supply and demand.
In the ensuing confusion, the National Association of Nigerian Students has threatened to embark on mass action if the federal government failed to take immediate steps to address the current fuel crisis in the country, even calling on the Group Managing Director of the Nigerian National Petroleum Company Limited, Mr Mele Kyari, to resign if he could not resolve the fuel crisis. The Kwara State government has taken a pragmatic step to address the issue by setting a task force to control hoarding of the product by filling stations.
It’s worth elucidating that the tightness in fuel supply at the moment is basically caused by logistics challenges. There is no need for the ongoing PMS scarcity and price hikes in parts of the country. The NMDPRA latest stock report, as at 28th April 2024, stood at 1.547 billion litres. This is equivalent to 30 days of fuel sufficiency. The lingering fuel scarcity is manmade. It can’t be gainsaid, arbitrage is a major driver of artificial scarcity as people are pushing to take advantage of the situation and make money. Often the actions of racketeers are blamed on the federal government. Also, the diversion of the products to neighbouring countries by selfish marketers is part of the problem. Hoarding of the product and other sharp practices by greedy marketers and other unpatriotic Nigerians are also responsible for the artificial scarcity.
Individually, we are also responsible for the artificial scarcity. Nigerians have formed the habit of purchasing fuel at exorbitant prices instead of being patient. Hence, panic buying by motorists worsen the situation. If there is no panic buying, those hiking the price of the product for their own interests would have customers to attend and so revert to the normal price. This is simple logic we need to understand.
It’s good to know that key downstream stakeholders are working round the clock to resolve the current fuel scarcity. They have assured the scarcity would fizzle out as soon as more product arrives and is circulated in the country. The federal government has also assured that there was no foreseeable intent to increase fuel prices, contrary to wild fears.
Downstream regulators, especially the NMDPRA, and security operatives should step up efforts to ensure this crisis is nipped in the bud before it leads to more frustration and dire consequences. They need to work together to address the unwholesome practices in the supply and distribution value-chain. It should no longer be business as usual