Again, In the Grip of Fuel Scarcity

Key managers in the oil sector engage in double speak as Nigeria groans under acute fuel scarcity

By Philip Oladunjoye

His mobile phone was his saving grace that day. With it, Charles Obinna, an accountant, virtually ran the activities in his office from a petrol station in Lagos where he had been trapped for hours in the long queues for fuel.

Although he kept assuring his subordinates that he was arriving office soon, he didn’t succeed in getting there until about 3.30 p.m.

Obinna was not the only Nigerian whose programme was disrupted by fuel scarcity that has seen the return of long queues to petrol stations nationwide.

Kikelomo Akanbi is yet another. She was stranded at a bus-stop as a result of fuel scarcity that persisted throughout last week. The money she had on her could not pay her way to her destination. The transport fare had suddenly jumped by more than one hundred percent. Akanbi eventually boarded a cab and alighted at a point where her money could cover. She had to trek the remaining two kilometres to get to her destination. These are some of the agonising experiences of many Nigerians in the past three weeks when the country was hit by a fuel scarcity.

The fear that there might be fuel scarcity first reared its head, February 14 when workers in the department of petroleum resources embarked on a strike action to press home their demands on the Federal Government for improved working conditions. Motorists swooped on all the filling stations to fill their vehicle tanks. An action which was regarded by top officials of the Nigerian National Petroleum Corporation, NNPC, as panic buying.

Ndu Ughamadu, group general manager, public affairs of NNPC, had attributed the initial scarcity to panic-buying resulting from the indefinite strike embarked upon by DPR workers. Jackson Gaius-Obaseki, group managing director, NNPC, however, allayed the fear of Nigerians saying that the nation’s refineries were operating at optimum capacity. He called on Nigerians to go about their legitimate businesses without fear of shortage of the products.

Similarly, Belema Osibodu, DPR spokesman had further allayed the fear entertained by Nigerians when he disclosed that all management staff of DPR had been drafted to the depots, terminal and jetties to man facilities, and to ensure that operations were not disrupted. “Operations will continue as normal crude oil will still be lifted and the nation will not incur any loss,” Osibodu had said. Those assurances did not ease the scarcity.

Seven days later, February 21, DPR workers called off their strike and resumed their normal activities. But the fuel scarcity refused to go. It has even been aggravated. Many reasons were advanced for the lingering shortage of the commodity.

Obaseki, who later admitted shortage of the product in the country attributed it to the threat of war in Iraq and the political crisis in Venezuela . He said the threat of war and the political crisis in Venezuela had a toll on Nigeria stocks, saying that import supplements had been difficult to come by as some countries were buying the product at any cost at the international market in readiness for the war. “The national stock was really low when the department of petroleum resources went on strike,” he declared.

Obaseki said NNPC had mapped out a strategy to forestall future scarcity. “Therefore, we have decided to place orders for fuel imports for two quarters at a time, whereby orders for the second and third quarters for this year will be made at the same time,” he promised

Joseph Akinlaja, general secretary, National Union of Petroleum and Natural Gas Workers, NUPENG, disagreed with Obaseki. He attributed the scarcity to shortfalls in supply from NNPC depots. He said the scarcity could have been a serious shortfall arising from a disagreement between NNPC and its fuel - importing contractors over freight and products costs.

Newswatch gathered that a solution to the scarcity in the immediate future might not be possible owing to the crisis between the NNPC and its fuel import contract holders over the price to be paid on the cargoes. The contractors were demanding for a review in the cost of the cargoes following the change in international market prices of refined oil. The NNPC has been battling to manage the demand.

Another reason being advanced for the fuel scarcity is the fear of possible increase in the price of the product. In the past, price increases were preceded by fuel scarcity. Government officials often argued that they could not guarantee constant supply of petroleum products due to existing subsidy on the products. Government had gradually removed the subsidy on the product which brought about the current price of N26.00 per litre of petrol and N24.00 for diesel and kerosine respectively.

The fear of a possible increase in the prices of petroleum products was, however, doused by the Petroleum Product Pricing Regulatory Committee, PPPRC, a committee that advises the Federal Government on petroleum products pricing.

Rasheed Gbadamosi, chairman PPRC, had assured Nigerians that any speculation of an increase in the price of petroleum products was baseless “Of greater significance to the PPRC is that the committee is not contemplating any upward adjustment of price ceilings of products and any speculation in this regard is baseless,” he said in a statement he made available to newsmen. According to him, the scarcity was as a result of unanticipated hitches in the supply chain. He urged Nigerians to stop panic-buying and allow the resumption of normal product flow. “We have been advised by the NNPC, which is the only participant left in the importation of supplement that the situation is under control and normalcy would return if the general public will eschew panic-buying and allow the resumption of normal product flow,” he advised.

Newswatch learnt that NNPC had been ordering fuel from neighbouring countries to ease the tension created by the scarcity. It was gathered that two vessels of a combined capacity of 66,000 tonnes arrived Lagos Port last week from Cote d’Ivoire .

The DPR workers’ demand which culminated in the strike action that triggered off the scarcity has been partially settled. The workers had demanded that the Federal Government should grant autonomy to the DPR and create a petroleum inspectorate commission, which would enable the department to generate its own fund.

The workers had also accused the management of DPR of not paying their welfare benefits which include: rent subsidy /home maintenance allowance; payment of arrears of 2002 salary increments, payment of hazard allowance and distribution of personal protective equipment/uniforms to security men and drivers.

The government, however, had even before the strike sought for a measure of autonomy for the petroleum department in its bid to re-organise the oil and gas sector. It has sent a bill to the national assembly to the effect, but it is yet to be passed.

On the workers’ welfare package demand, that Federal Government had instructed the special adviser to the president on petroleum matters to take adequate steps to ensure that funds were available for the procurement of operational facilities and the payment of staff benefits.

Newswatch Volume 37 No. 9, March 10, 2003