Nigerians reeling under the yoke of fuel scarcity
An analysis by Yunus Yusuf
With barely 26 days to the end of 2022, and with the busy Yuletide season beckoning, Nigerians have continued to groan over scarcity of Premium Motor Spirit, popularly known as petrol, in major cities across the country.
Correspondent of the BusinessIntelligence (TBI Africa) observed queues at most filling stations in Lagos an environs, as motorists spent several hours to buy petrol.
The situation is unabating in Lagos, particularly in Epe, Badagry, Ikorodu, Agege, Ikotun, Surulere, Ikorodu road, Maryland, Ikeja, Anthony, Bariga, Ilupeju, Ikoyi and Victoria Island areas, as motorists are agitated for spending several hours on queues.
Though many filling stations in Lagos still sell fuel at the official price of 170 per litre, residents continue to lament the frustration experienced in getting the product to buy.
In Badagry, independent marketers sell petrol at between N280 and N300 per litre while some filing stations are under lock and key due to lack of supply.
In Badagry said from Mowo to Aradagun along Badagry Expressway, only two filing stations out of 10 stations sold fuel throughout last week.
At Samuel Ekundayo Way, Badagry, Mobil filing station and ENYO filing station sold fuel at between N170 and N175 per litre, but both experienced long queues of motorists.
Mr Ibrahim Opeyemi, a motorist, lamented that he was on the queue for two days without buying fuel.
“I have been on queue since Wednesday, the price of petroleum here is reasonable, it is N170 and they are selling the product but many independent marketers in Badagry are selling a litre for N300.
“I want to appeal to the government to address the scarcity before 2023,” he said.
Mr Sam Ofade, a resident of Badagry, said illegal bunkering was responsible for the high price of petrol in Badagry.
According to him, over 500,000 litres of petrol are diverted to the Republic of Benin through independent marketers who collude with illegal operators to shortchange the government.
“Many women from Benin Republic cross to Badagry through our borders to buy petrol inside Ragolis bottles and Jerry cans.
“I want the government to investigate the illegal bunkering and high price of petrol in Badagry,” he said.
In Mushin-Isolo, TBI Africa found out that selling in jerrycans was more attractive to attendants at filling stations who charged additional costs.
At G&G filling station along Mushin-Isolo road, a barber, Mr Ismaila Ofolahun, who bought fuel in his keg decried the difficulty in buying fuel.
Ofolahun said he paid N1000 before he was allowed to buy fuel in his 50 litre keg for N5,000, bringing the total cost to N6,000.
“I buy in excess so that my business will not run down,” he said.
In some suburbs of Ikorodu, majority of filling stations of Independent marketers sell petrol between N230 and N250 per litre.
A visit to Dikram, Bravo limat, Akamok, mallo, Collins, Alaka Happy Days and Dominions Favour filling stations showed that they were all selling at above the regulated price.
Some of the attendants who spoke said: “It is only during scarcity vehicles patronise us.
“We cannot sell below N230 per litre because of the high cost of foreign exchange in buying the product from depot owners.”
Motorists in Ikorodu town suffer the same faith, for instance at NIPCO filling station in Omitiro, petrol is sold for N175 per little while ADB filling station at Itamaga sells at N250 per litre, but they are subjected to long hours on queues.
Mr Samson Alejo, a motorist, said he expected the next government to do everything possible to stabilise fuel supply since it had been established that subsidy would be removed totally.
Another motorist, Mr Femi Alekun, said petrol marketers should not be allowed to put Nigerians in dilemma anymore, and that their unions must be disbanded.
The lingering scarcity has thrown up a thriving “Black Market” in many cities, with hoodlums taking advantage of the situation to hoard products and sell to desperate motorists in jerrycans at exorbitant prices.
A five litre jerrycan goes for N3,000 and 10 litres for N7,000 in the black market.
It was also observed that many women and youths are making brisk business, taking advantage of the perennial fuel scarcity.
Some homes around Idi-Araba area of Mushin had various litres of petrol displayed on their front porches for sale.
On Ikorodu road, black market activities are more pronounced as many youths sell petrol in jerrycans in front of filling stations.
TBI Africa found out that only filling stations owned by Major Oil Marketers Association of Nigeria (MOMAN) sell at the regulated price of N170 per litre, while those owned by Independent Petroleum Marketers Association of Nigeria (IPMAN) sell between N220 and N260 respectively.
Petroleum marketers have blamed private depot owners for the lingering fuel scarcity, while some stakeholders blamed the Nigerian National Petroleum Company Ltd. (NNPCL) for not explaining to Nigerians the cause of the current fuel scarcity in the country.
Some marketers who preferred not to be mentioned attributed the current scarcity of fuel to three major factors.
One is that the NNPC is broke and has no money to finance importation of fuel into the country.
To attest to the fact that NNPC is broke, the Central Bank of Nigeria (CBN) recently said the NNPC, which used to remit 3 billion dollars into CBN account some years ago is now unable to do so.
The company is said to be highly indebted to some of its contractors/suppliers who are no longer ready to take the risk of supplying petrol to NNPC on credit.
The second point is crude oil theft, which was allowed to fester for too long, which has reduced Nigeria’s production capacity to below one million barrels per day.
This is considered a major blow to NNPCL’s ability to continue with its Direct Sales of Crude Oil and Direct Purchase of Petroleum Product (DSDP) programme.
NNPCL currently has no crude oil to facilitate the DSDP programme as many of the contractors no longer have access to crude oil proceeds to finance the purchase of refined products for use in the country.
TBI Africa learnt that there were products in vessels on the high seas but the owners of the products were unwilling to take the risk of supplying them to NNPCL on credit.
The situation is compounded by the fact that other players that could have helped to import fuel to ease the fuel scarcity cannot do so due to scarcity of foreign exchange (forex) or its high cost.
The marketers access forex from the black market at an average rate of between N700 and N800 to the dollar, which is considered a disincentive.
The petroleum marketers themselves have attributed the current fuel scarcity to unavailability of petroleum products and difficulty in accessing forex.
According to the marketers, Independent Petroleum Marketers Association of Nigeria (IPMAN), Major Oil Marketers Association of Nigeria (MOMAN) and Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) are struggling to get products from NNPCL, the sole supplier.
Mr Mike Osatuyi, the Operations Controller of lPMAN, alleged that NNPCL had stopped importing enough petrol to meet demand in the country.
Osatuyi was emphatic that marketers could no longer sell at the regulated price because the unsteady supply of petrol had resulted in higher prices at depots.
“We are experiencing scarcity because the product is not available.
“The price of a litre of petrol at private depots is currently between N205 and N210 as against N162.50.
“The Nigeria National Petroleum Corporation (NNPC) Ltd., is the sole importer of refined petroleum products, which are not readily available to marketers,” he said.
The oil marketers and petroleum depot operators, have, however, called for quick intervention by the Federal Government.
The Chairperson of DAPPMAN, Mrs Winifred Akpani, urged the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Ports Authority (NPA) to comply with the Federal Government’s directive to end payment of port charges in dollars for petroleum products brought into the country.
Akpani maintained that accessing forex through the CBN window would enhance their capacity, facilitate seamless supply of petrol, and birth a regime of sustainability in terms of storage, distribution and supply across the nation.
Stakeholders have also flayed the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for not protecting consumers of petrol from greedy marketers.
They blamed NMDPRA, which they said had continued to look away, leaving consumers to their fate.
“When the authority was operating as the Department of Petroleum Resources (DPR), it monitored and ensured that retail outlets that hoarded fuel were penalised and forced to sell.
“Likewise retail outlets that sold above the regulated price were penalised,” said a source who declined to be mentioned.
The source added that the management of NMDPRA had become a toothless bulldog that could not even bark.
The source urged NMDPRA to wake up to its responsibilities or let Nigerians know if the federal government had fully deregulated the price of petrol through the back door and save the consumers untold hardship.
Meanwhile, the Group Executive Director, Downstream, NNPCL, Mr Adeyemi Adetunji, said the company was making efforts to end the lingering supply crisis, adding that about 2 billion litres of petrol sufficient to last for 30 days was available in its depots.
He said: “The NNPCL assures Nigerians of fuel sufficiency of over 2 billion litres availability. The company has enough stock in its depots to last for at least one month.”
The NNPCL attributed the long queues at filling stations across the country in recent times to the ongoing road infrastructure development project around Apapa, which is being complicated by the access road and challenges in parts of Lagos depots.
Adetunji said Abuja was equally impacted by the challenges experienced in Lagos, although he promised massive product load out including 24 hours operations in selected depots and extended hours of operations at strategic stations to ensure products supply sufficiency nationwide.
He said vessels had been programmed and massive load out from depots to various states were closely monitored.
He reassured consumers that NNPC was prepared to significantly increase products loading from depots to different parts of the country.
Also, NMDPRA in a statement on on Nov. 30 assured there were no plans to hike the price of petrol.
The statement said: “The Authority wishes to inform the general public that the Federal Government has no intention of increasing the price of PMS during this period.
“The Nigerian National Petroleum Corporation Limited (NNPCL) has imported PMS with current stock levels sufficient for 34 days.
“Consequently, products Marketers and the general public are advised to avoid panic buying, diversion of products, and hoarding.”
The Authority said in keeping with its responsibilities as outlined in the Petroleum Industry Act (PIA), the Authority assures the public that it would continue to monitor the supply and distribution of all petroleum products nationwide, especially during this holiday season.
Amid all these challenges, stakeholders insist deregulation of the downstream sector of the oil and gas sector remains the best solution to ending fuel scarcity in Nigeria.
