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Nigeria's Fuel Bogey (Posted 20th Mar, 2001) Tell your friends about this page! Email it to them.

Nigeria’s President Olusegun Obasanjo, retired army general is not known to turn away from battle. Yet one battle Obasanjo may have lost is the one against fuel scarcity. By the president’s own admittance, the country’s perennial fuel scarcity may have defeated him. Obasanjo who spoke with airport correspondents at the Lagos airport terminal recently on his return from a trip described the frequent fuel scarcity as “a bogeyman”. The President who was in a rather lighter mood, had been bantering with the journalists, as he walked away from the plane that brought him to Lagos. 

Reasons for Scarcity 

Obviously, several bottlenecks which the Nigerian National Petroleum Corporation, NNPC said were responsible for the latest fuel shortages were yet to be taken care of. Last month, the corporation’s spokesman, Ndu Ughamadu, said that the scarcity had been caused by a fire outbreak on a fuel vessel MV Ife at the Okrika jetty in Rivers State. At the time of the incident, Ughamadu said 110 million litres of petroleum products mostly petrol and kerosene was trapped in the tanker vessel’s underbelly. Another reason proffered by Ughamadu was what he called technical hitches at the major off load facility at Atlas Cove Jetty at the Apapa quays in Lagos. Amid the fuel scarcity, the NNPC sacked 57 of its staff said to be involved in shady fuel deals. 

Department of Petroleum Resources DPR, director, Mac Ofurhie had also been meeting with various interested parties involved in fuel supply distribution in order to find lasting solutions to the problem.

Trading Blames 

Also recently, senior officials of the NNPC and the National Union of Petroleum and Natural Gas Workers, NUPENG traded blames on who and what was responsible for the latest wave of fuel scarcity. Joseph Akinlaja, NUPENG’s Secretary-General reacting to claims that his union members were on strike said emphatically that “NUPENG members were not on strike,” adding that “they are ready to lift fuel” where ever available to reduce the biting scarcity in Lagos. Akinlaja said that supply of fuel at the NNPC depots was not adequate and alleged that his members had to pay bribes to depot officials before being allowed to lift fuel. Another industry group, the newly-formed Depot and Petroleum Products Marketers Association of Nigeria, DAPPMA blamed the current fuel situation on distribution problems rather than non-availability of the products. The group’s chairman, George Enenmoh however berated the NNPC for what he called its “over-reliance” on the major marketers - national oil, Mobil, Total, Agip, AP, Unipetrol and Elf, while neglecting the indigenous marketers, better known as independents. Said Enenmoh; “a situation where our facilities are idle and others are on strike causing scarcity does not augur well for the nation”. Adding: “At this moment, (the) NNPC has enough petrol, but the problem is the distribution network. Our facilities are available to call the bluff of the major marketers and ensure the appropriate distribution of products nationwide”. 

Proposed Deregulation

Another dimension was however added to the fuel scarcity issue when Dr. Ibrahim Ayagi, chairman of the National Economic Intelligence Committee, NEIC, said at a press conference in Abuja that the deregulation of the petroleum products market, and thus its step for government. Appraising the scenario Ayagi said: “the fuel supply situation throughout the country had worsened”, adding that “the scarcity has revived the controversy over appropriate pricing of petroleum products”. Ayagi said further that NEIC had recommended deregulation of the sub-sector to government. Arguing for such a move, Ayagi said, “It is the view of the committee that the deregulation of the prices does not mean that government would become a disinterested party in the outcome of the deregulation exercise”. In 1993, the NNPC had first sought to raise fuel prices by starting a campaign for what is called: “Appropriate pricing of Petroleum products”. Although that campaign was unsuccessful, according to analysts this was due to the NNPC’s image problems”. Nigerians had seen the corporation as a hotbed of corruption. Nonetheless, fuel prices have been raised a few times since then. 

Last year, the corporation again sought to increase fuel prices. After a nationwide strike called by the Nigerian Labour Congress an embattled President Obasanjo drastically reduced the price increase to a marginal N2 per litre of petrol N20 to N22 and diesel from N19 to N21). 

Labour Angling for Battle

This time around, the NLC’s president Adams Oshiomole who led the last year’s strike has again warned government against effecting any increase in the current price of fuel. Oshiomole threatened to once again lead workers out on a strike action against such a move. Oshiomole accused government of deliberately creating a scarcity in order to perfect its move to increase fuel prices. Said Oshiomole: “The government has naively assumed that if people are forced to pay higher prices when they formalise the increase, they will not find any difference”. Scathingly, Oshiomole said: “what we are witnessing is a government that has no political will to deal with the fuel crisis”. 

But if Ayagi’s position is anything to go by the Obasanjo administration may simply hands off the petroleum products marketing sector. That would herald the dawn of market driven prices and perhaps, as analyst agree, the death of the fuel scarcity bogey. Government is planning a debate on deregulation of oil industry. One 12th February, It raised a committee to regulate the pricing of petroleum products. Former Minister of National Planning, chief Rasheed Gbadamosi, heads the committee.

The Nigerian senate started a public sitting in deregulation on Friday, March 9, 2001


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