Another fuel scarcity imminent as NUPENG threatens nationwide strike
Fuel station

Adebayo Obajemu

Nearly two months after the Federal Government gave assurances  that the ongoing petrol shortage in the nation’s capital and other parts of the country would ease, queues at filling stations in Abuja and Lagos have grown longer.

Investigations by  our correspondents in the nation’s capital have revealed that though some filling stations were not open, those  opened to customers had long queues with motorists complaining of having to spend several hours on the queue.

The scenes  at most petrol stations selling fuel at between ₦200 to ₦250 per litre were chaotic as seen at Conoil and Total filling stations located at the Central Business District of Abuja .

Deji Adeyanju, a human rights activist blamed the scarcity on the insensitivity of the ruling APC government.

The Federal Government had about a month and half ago blamed  the latest round of petrol scarcity to flooded roads in Lokoja, Kogi State, a major transit route for tankers bringing products into Abuja.

But the flood has since receded with traffic able to ply the road, yet fuel scarcity persists, a development that has put a lie to government’s argument.

In Lagos residents woke up on Tuesday with most filling stations under lock, which created a stampede among motorists drove transport fares high, leaving many commuters stranded. No explanation was offered for the sudden turn of events.

Both the Ministry of Petroleum Resources and the NNPCL have maintained sealed lips since the current fuel scarcity. The National Oil company, NNPC Ltd has repeatedly said it has sufficient stock of petroleum products to last 30 days, urging the public not to give in to panic buying.

Last week, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, had advised marketers against taking advantage of the situation to hoard the product.

But it was learnt that operators are dissatisfied with the current pump price of the product, especially with the depreciation of the naira and rising inflation which had raised the landing cost to over N400 per litre. They want government to increased the subsidy on fuel to improve their profit margin, which has been eroded by forex and inflation challenges.
However, in a chat with journalists, the Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, IPMAN, Chief Chinedu Ukadike blamed it on logistics and bad state of roads in the country.

Chief Ukadike explained that most inland depots were without the product, saying it was taking longer days for trucks to move from the south to the northern parts of the country.

“The problem is logistic in nature and also the effect of long hauls because most of the depots are without the product. The roads are also very bad and from Lagos to Suleja or Kaduna it takes about four days now rather than the normal 48 hours if the roads were in good condition. There is also the challenge in Apapa. The way to go is to get the pipe lines working”.

In Lagos, as in Abuja, same chaotic scenes were recorded in most fuel stations in Lagos, the long queues affected the free flow of traffic leading to gridlocks in areas like Lekki,  Lagos-Berger road, Ikeja, Alakuko-Dalemo, Awolowo road, Ikoyi; Ojodu, Agindingbi and other parts of Lagos metropolis.

The ubiquitous queues  persisted  in many filling stations across Lagos  last Tuesday and Wednesday, without a let up on Friday, which worsened traffic situation and leaving many stranded at bus stops across the state.

Blaming the bad roads may not be the whole story according to  Business Hallmark’s findings. The current difficulties in accessing fuel may partly be due to threat to shut down supplies by the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) due to rampant extortion, intimidation, and violent attacks by hoodlums on its members.

Mr. Afolabi Olawale, General Secretary of NUPENG, in an October 28 letter to the state governor, Babajide Sanwoolu, said the union had previously denounced the activities of these elements and written to several authorities, including security agencies to curtail them, but to no avail.

“I have been here  for almost an hour because public buses are scarce, when I asked I got to know that some of them are on queues at the various petrol stations. How long are we going to continue like this. If they want to remove the subsidy let them do so. The important thing is for us to get fuel,”  Rotimi Adeola, a civil servant told Business Hallmark.

Since the debate and controversy  around  the sustainability or otherwise of paying fuel subsidies in Nigeria assumed existential threat, petrol pump price has risen from the regulated price of N165 per litre to around N180. With the current crisis fuel price has jumped to as high as N220 where available. In the east and north, it as about N250 per litre.

Investigations showed that Petrol stations with the most queues are those selling at the government-regulated price, and their numbers have steadily declined as the week went by.

“Fuel stations are now selling at their own discretion, the commuters  and motorists are at their mercy”, Anjorin Ayorinde, a private car owner, said.

Another commuter urged the federal government to find a lasting solution to this “growing shame.”

Recall that earlier in August while presenting the Medium Term Expenditure Framework and Fiscal papers, which forms the basis for the budget, Mrs. Zainab Ahmed, minister of finance, budget and national planning, stated that the Federal Government will spend N6.7 trillion on fuel subsidies in 2023.

However, when presenting a N20.51 trillion budget plan for 2023 to the National Assembly in October, President Muhammadu Buhari advocated the elimination of fuel subsidies in 2023, claiming that the programme was unsustainable, given the current economic conditions.

“Discontinuing the policy is necessary for the country to manage its limited resources. As a country, we must now confront this issue taking cognisance of the need to provide safety nets to cushion the attendant effects on some segments of society,” he said.

Experts have advocated removal of fuel subsidy as the only panacea to the challenge but the federal government is not ready to do so now on account of political correctness.
Early in the year,  the finance minister said Nigeria  was merely struggling to service its debts, adding that continued subsidy will hurt the economy further.

The World Bank in March estimated that the  country may lose N5trn oil revenue to subsidy in 2022, arguing that seven million Nigerians may slip into poverty this year

Also the former Central Bank governor and now  Anambra State governor Professor Charles Soludo, last week harped on fuel subsidy removal

Owing to negative consequences of the fuel subsidy policy, Anambra State Governor, Prof. Chukwuma Soludo called for the government to phase it out immediately, noting that the Federation Account Allocation Committee (FAAC) hasn’t credited states in recent time as a result of the burden of fuel subsidy.

“This premium motor spirit (PMS) subsidy is costing us an additional N4 trillion than was originally planned. So, this is an unplanned deficit. We have gone to the National Assembly; we have gotten approvals, but the approval was simply for us to cut down on some of the investment costs.

“Already we have borrowing increasing significantly and we are struggling with being able to service debt because even though revenue is increasing, the expenditure has been increasing at a much higher rate so it is a very difficult situation,” Ahmed had said.

“So Nigerians need to understand that this PMS subsidy we are carrying now is hurting the nation, its impeding the government’s ability to be able to invest in human capital development. N4.5 trillion is money that we could have invested in health or education.

“But where we are investing it in consumption, which is very wasteful, because how many Nigerians own cars that are benefiting from this subsidy.”

“We are in some kind of crossroads. It is not hearsay to say that Nigeria has not derived what it should from the current high crude oil prices, rather rising crude oil prices are posing significant fiscal challenges to our economy and may lead to some negative receipts and indeed we have started seeing already those negative receipts.

“There are three factors preventing Nigeria from fully benefiting from the current boom in the international crisis. First of all, our prediction had fallen below Nigeria’s estimated capacity and the OPEC quota because of insecurity vandalism and theft. Secondly, the domestic price of payments has remained fixed, while global PMS prices have continued to rise.

“The third is that rising international crude prices also increases the burden of PMS because we buy refined petroleum products. The higher crude oil price goes in the global market, the more we’re paying for PMS, and by maintaining this PMS subsidy we as a country unfortunately forego investments that will have used the monies into essential infrastructure, goods or services that would have increased the overall productivity of the nation. So this is really the bane of the major issue that we’re facing now.”

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