By Cudjoe Kpor
A sense of purposefulness is coming from Nigerian National Petroleum Corporation (NNPC) as regards fuel supply. So does its timeliness. Both the National Assembly legislators and the Presidency did not have the same sense of urgency reflected in purposefulness and timeliness of their actions. So, the fuel scarcity has no chance of getting solved before Christmas. Needless to add, both arms of the Federal Government failed. Now, NNPC is turning to fire brigade supply of fuel nationwide for the Christmas and New Year seasons. With barely three days to the start of the festivities, the corporate oil giant is up against an uphill task with predictable failure distributing fuel up North and in the hinterlands, mixed with probable success in the cities and towns in the South.
Dr Ibe Kachikwu, Minister of State for Petroleum Resources, has directed Pipeline Products and Marketing Company (PPMC) and Petroleum Products Pricing Regulatory Agency (PPPRA) to get special supplies of petroleum products everywhere countrywide for the festive season. The two subsidiaries of NNPC have less than three days. In a statement in Abuja at the weekend, Mr Ohi Alegbe, Group General Manager (Public Affairs), NNPC said Kachikwu directed the special intervention supply to start at the weekend to ramp up additional quantities of petroleum products via massive truck-out to guarantee product penetration to all nooks and crannies. The truck-outs are dispatched mainly to Abuja, Kaduna, Kano, Enugu, Ibadan and Jos as distribution hubs from where the products will flow everywhere else nationwide.
It sounds fantastic and timely till one reads the paragraph which says PPMC should distribute by road because vandals have broken down its pipelines. Then I began to wonder when the government which came to power on the change mantra would start solving the hydra-headed problems which confront the country and its citizens in time. Unless the promised change implies more of the same: Moan about the country’s problems publicly, blame the predecessors’ incompetence and incapability to solve even one problem – but they succeeded in looting the treasury dry. If the moaning lasts four years, change for another government and the blame game cycle restarts.
I am sure President Muhammadu Buhari’s administration knew all the monumental problems confronting Nigeria before it came into power. We heard them all perfectly during the campaigns. Now is the time to solve the problems it was elected to solve. This is no time to look back and play blame games. If ex-president Goodluck Jonathan and his group of thieves looted the treasury dry, jail all. But that only takes a few big-time thieves out of the system. It does not advance the country one step. Thus, first and foremost, Buhari must solve the problems and make Nigeria move forward.
The snag is the Presidency knew the fuel scarcity problem was coming with a December 25 deadline. For, demand for fuel is always high during the Xmas and New Year seasons. But the government was not able to solve it till it ended up with fire brigade NNPC intervention distribution. Which raises a disturbing question: What will happen if it starts to solve more intractable problems? The mind-boggling, overwhelming unemployment problem for instance; worse, the collapse of tertiary education; then ensuring national food self-sufficiency and national industrialization, among others.
Nobody needs a second warning: Every informed person, especially a motorist, must prepare himself against a prolongation of the ongoing fuel scarcity. For, the probability is high that even by year end, fuel will not be flowing freely once again in fuel stations till mid- to end-January. On the contrary, for Christmas, the current fuel queues will persist albeit with diminishing length. Given the high volume of demand for fuel by motorists travelling to one destination or another for Christmas, the touts selling fuel illegally in jerrycans will still be doing their brisk business along the streets and expressways. Vehicle owners who cannot afford to queue at the stations must be prepared to pay the high prices between N120 to N200 per litre or more – instead of the now “variable” official price of between N87/litre to N97/litre.
The reason for the continued scarcity is no secret: Minister of Information Alhaji Lai Mohammed said it on Monday. The Major Marketers Association of Nigeria (MOMAN) is not importing the 60 per cent quantity it used to import. Neither the government nor MOMAN is saying a word about what happened. But if we read their lips, there is as usual their dispute over who pays the accumulated bank interest charges on loans the private marketers took to pre-finance fuel imports and foreign exchange losses they incurred when the government defaulted on paying for the subsidy after the products were delivered. Some of the arrears date back to August, last year. And the unpaid arrears have become one of the “sins” of Jonathan which Nigerians are suffering from at the moment, according to Lai Mohammed. Consequently, NNPC is the sole importer of the fuel currently on sale. It is doubtful if NNPC has the capacity to import 100 per cent quantity to meet nationwide demand within this short space of time.
In plain language, fuel scarcity will persist through Christmas into the New Year till either the government and MOMAN resolve their dispute or NNPC ramps up its import beyond the 40 per cent of national daily demand of 40 million litres per day. The oil and gas corporate behemoth says its research does not support the 50 million to 55 million litres per day national demand some others bandy about.
Briefly, the National Assembly failed to deliver on time. It failed to see the sense of urgency needed for passing the N464 billion Supplementary Budget President Buhari sent to it. Compare the speed with which the Senate took the controversy-drenched anti-Social Media gag bill through second reading in eight days. Yet the senators took two weeks to approve on December 1 the President’s supplementary budget sent to them on November 18. Meanwhile, it takes MOMAN’s importers 21 days to land their consignment of imported cargoes of fuel at the jetties in Lagos. That leaves only four days to Christmas.
That was why Mr Obafemi Olawore, Executive Secretary of MOMAN, gave the warning signal the week prior to passage of the supplementary bugdet: “We wish to remind our distinguished Senators and members of the House of Representatives that the least time to open Form M/Letters of Credit, book cargoes, sail vessels to arrive Nigeria plus discharge time at the jetties would take about 21 days.”
That is, if everything works well. The problem is, from the depots in Lagos and beyond, everything can go wrong, despite the best intentions: Depot owners top up the ex-depot price of N77.66 per litre price for the independent marketers. Their profiteering makes the latter also divert products where they can sell the fuel fastest for the highest price; if an independent marketer can sell the entire tanker-full in Lagos instead of staying on the road for two days to get to Sokoto or Maiduguri, all the better. Let the motorists upstate stew – pay the highest prices per litre of petrol for any trickle upstate and make a lie of the government’s attempt to bridge uniform prices nationwide. Then the hoarders at the fuel stations and the sellers to touts are all encouraged by the panic-buying public.
Still, Alhaji Lai Mohammed was very sure of the Federal Government’s ability to deliver on its promise of ending the fuel scarcity by Christmas: So he assured that within a few days from December 1, 2015, fuel would be flowing everywhere nationwide. The minister, who gave the assurance during a courtesy visit to Daily Trust newspaper in Abuja, had explained that the N522 billion approved by the National Assembly to pay off MOMAN’s subsidy arrears and for current supply, would adequately cover the fuel subsidy till the end of year. Besides, fuel scarcity that leads to vehicle queues lined up at filling stations across the country were gone forever. “We can confidently announce here today that the scarcity will end in a few days. Subsidy payment till the end of the year has been approved by the National Assembly,” Mohammed had told the journalists.
The few days has since extended into the third week. No end of the scarcity is in sight. Instead, there is rather a nauseating blame game among the trio of the major marketers who import about 60 percent of the fuel, Federal Government which owed them arrears dating back to August, last year and the National Assembly which should appropriate the budget before the executive, represented by the Presidency, can spend. In fact, some would even blame consumers for not buying e-cars, especially solar powered vehicles in this hot sunny weather – rather than the internal combustion engines.
Lai Mohammed was grandly over-optimistic: The time element in retrospect made his assurance of ending the scarcity doubtful at best and at worst, untrue. And the blame must be heaped, first, on the Senate and the House of Representatives. They did achieve the desired result of passing the President’s supplementary budget on December 1, 2015. But it took them two weeks to scrutinise it. The N575 billion supplementary recurrent budget includes N413bn for fuel subsidy arrears for MOMAN about half of which dated back to August, last year. Not only that. The lawmakers increased the proposal from the Presidency by N108.9 billion to capture the subsidy demands for the fourth quarter of this year.
But apart from MOMAN executives who wanted their money and were conscious of the time element to get the fuel in before Christmas, nobody worried when the lawmakers shilly-shallied on passing the supplementary budget. Critics of the lawmakers argued that with their own N10.61bn allowance tied into the budget, there was no way they would not pass it before going on Christmas recess.
But passing the budget is only the beginning of the hard work to have the fuel in, transport it across the length and breadth of the country before the Christmas break. And that is now unlikely to happen. That is why it is up to all motorists to prepare for the fuel scarcity to persist till way after Xmas and New Year.
The good news is that Dr Kachikwu told newsmen in Lagos the same day the national lawmakers passed the budget that the government has already issued Sovereign Debit Note (SDN) to MOMAN, which is as good as having paid them off for the debt the government owed them. (Note, the implication is that the SDN was issued in anticipatory approval of the budget by NASS. A case of the Presidency working ahead of the legislature. But if I recall it well, the late Senator Chuba Okadigbo, the colourful one-time Senate president, once warned that the anticipatory approval payment was one of the banana peels a public officeholder should not count on if anything goes wrong along the approval chain.)
Kachwikwu on a visit to Lagos the same December 1, appealed to Nigerians to be more patient, admitting that non-payment of subsidy claims to marketers contributed to the scarcity. “We are hopeful that this week their money will be paid because we have released the Sovereign Debit Note (SDN) and once that is released, with the support of NASS, which means it has been assured. We are also working towards paying the foreign exchange differentials to marketers to ensure smooth flow of petroleum products into the country,’’ the minister told newsmen.
Then after two weeks’ delay by the legislators, the Presidency also relaxed after the supplementary budget was passed. Mrs Kemi Adeosun, the Finance Minister, announced on December 9 after more than a week’s delay after passing the bill, that the marketers were paid.
But the figures did not add up. At the time of passing the supplementary budget, Federal Government owed MOMAN N120.5 billion for fuel supplied from August, last year to year end. Then from January to September, this year, the outstanding bill was N292.8 billion. Total, N413.3 billion. So that by adding the extra N108.9 billion for the last quarter of this year, the total indebtedness to MOMAN would be N5222.2bn.
Adeosun announced paying MOMAN N407 billion. This figure was about N6 billion short of the total owed the major marketers. That was bad enough. In addition, there was the outstanding unpaid debt of N270 billion owed by the marketers to the banks for foreign exchange transaction costs and interest charges. It now seems as though the deafening silence from both MOMAN and the government stems from disagreement over the interest and bank charges and for which reason MOMAN members refused to import fuel and NNPC has to try to make up the shortfall.
But no matter how much corner-cutting could be made, there was no magic to making the fuel flow into the country 21 days after December 9 which will beat the Christmas deadline.
The Presidency’s failure only aggravated the legislature’s.
The Petroleum Ministry and NNPC, as well as its subsidiaries’ work is not done till the fuel is landed at the jetties and transported from there by PPMC. If transported from the jetties or tank farms by pipeline, the vandals perforate them and siphon their share and either spill or inflame as much of the rest as possible. The minister of state says from January, PPMC, police and Department of Petroleum Resources (DPR) will track tankers from their loading bays till they reach their destinations with their products intact. Such tracking, in theory, will ensure the petroleum products will get to their destination without diversion or discharge anywhere but their assigned depots and independent marketers’ tanks for sale to the public.
The modality for doing that has not been made public yet. But monitoring and inspecting the product volumes at check-points may worsen adulteration problems; or clamping the outflow spigots of tankers with official seals which can only be opened at their destinations, will make criminals spawn “appropriate technology” to open the clamps, take out as much of the fuels and reseal them. The day they are caught, the Nigerian way, they will swear by everything holy that the devil made them break the law.
NNPC and the Petroleum ministry are obviously ahead of the logistics supply curve. Still, their efforts will come to naught if adequate quantities of fuel do not come in to be distributed to motorists at fuel stations. These charges used to hold back settlement of disputes between fuel marketers and the government and determined whether or not the consuming public would have access to the fuel at the pump at their convenience and at the regulated price of N87/litre.
The alternative is well-known: Wasted man-hours in fuel queues at filling stations with no guarantee that the reservoir would not run dry if the pump nozzle is inserted into a car’s fuel tank… Alternatively, those in a hurry and have money buy from the ubiquitous black marketers in jerrycans. They take the risk that what they paid the high prices for is not fuel adulterated with kerosene to emit thick clouds of smoke or with water or other cheaper fluids to knock out their engines.
Thus, the tallest obstacle in the fuel supply chain is time. That is irretrievable once lost. In fact, if the lawmakers were aware of the time factor, and they had their sense of urgency right, they would have burnt the proverbial midnight candle at both ends to ensure that they passed the supplementary budget in less than one week. Ditto the Finance Ministry paying MOMAN within 24 hours the budget is passed – and complete the paperwork later.
Commentators have said it already that the National Assembly, which mistakes opposition politics in a democracy for antagonistic politics, is not jelled together for the hit-the-ground-running role Nigerians voted them into power to play. Never mind theirs is bi-partisan leadership, a first in the Senate’s history. Needless to add, they hardly see any sense of urgency in solving the monumental problems bedeviling the country and its 170 million population.
