Last line on the Fuel Scarcity


Only God knows why we love so much fire brigade approach in this nation. When would it ever end? We may blame the scarcity on Mr. President, Minister of State of Petroleum Resources, the GMD and Marketers for all I care from now till the end of the world. But the truth is that we have been unable to deal with the recurrence of this menace for over four decades. The oil and gas structures like the political structure of this nation were built on sand and faulty foundation. Without much ado, we need a rebirth in the downstream sector. We have a very huge fundamental challenge in the downstream sector that goes beyond the sale outlets. The bitter truth is that the media show of sealing stations is just a window dressing and it would remain so. The issues are deeper than meet the eyes. Apart from the Majors and big Independent Marketers, most of the small outlets get their supplies through third party spot marketers and profiteers at 190-200/litre. Do we in all honesty expect them to sell at N145/litre? How many of those that have diverted the products have we prosecuted and convicted for economic sabotage? There are shortages because the forces of demand and supply are at play. We know that marketers long suspended importation of petrol because of alleged increase in the landing cost, that the foreign exchange is excruciatingly high, that the cost of funds in dollar of previously imported have not been reimbursed, that bank loans taken have amassed so much interests and that their bankers are not willing to extend more facilities to them etc. We have heard these excuses in the past and for decades they remain the same excuses. So why are we unable to proffer solutions to adderess the issues? Why are we the only oil producing nation going through nerve wreaking experiences from time to time? Do we really know the cost and negative impacts of this scarcity to our economy? That we have been in this cycle of a recurring decimal of fuel scarcity for more than four decades tells me that we need a new model for our downstream sector. No finger pointing can heal us of this behemoth. We need to get serious now!

There cannot be any substitute to home brewed petroleum products. That is the beginning of resolving the perennial scarcity. Just as in agriculture, why should we as a nation not produce the petroleum products we consume? Why must we be solely reliant on imported petroleum products? We should make the refineries work or get investors to build, operate and transfer in line with private partnership arrangements of this government. But in order to get the investors’ buy-in, our laws must support their investments. That was one of the cardinal objectives of the jettisoned PIB.

2. Strengthen the National Oil and Gas Laws that support investments’ opportunities in the downstream sector, deal with the obsolete fiscal and administrative frameworks, deregulation, liberalization issues etc.

3. Make the National Oil Company (NNOC) totally free from political and government interferences. The call for a strong NNOC has become an imperative with this crisis. Without the NNPC importing petrol, what would have been the fate of the common man when other marketers suspended importation because of high dollar and crude costs? However, we need to take it a step further by ensuring that the NNOC runs like a typical commercial oil and gas company that would at the end pay taxes and royalties to the government. This work-and-transfer all the extracted milk into a central feeding bottle for baby feeders that come to Abuja every month cannot grow any NNOC. If the NNOC is commercialized through a partnering option, goes to the market to source for its funds to support its operations, nobody would dare put it in the dock or public domain since it would be answerable and responsible to its partners. Again, this was one of the intendments of the PIB. Recently, the Federal Government said the NNPC currently absorbs or pays N26/litre subsidy on all imported Petrol because of the disparity in the landing cost that has increased due to the increased crude oil price. How can government say it does not believe in subsidy and yet acknowledges that the NNPC takes up the responsibility for the subsidy element? Was this taken through the National Assembly that would scream blue murder, lampoon the NNPC and accuse it of running a government within a government? I foresee the NNPC again becoming the whipping boy and the scapegoat of this scarcity in no distant time.

4. Emplace a Foreign Exchange regime that is easily accessible to all the players.

5. Establish a very strong regulatory agency that would truly take its pride of place. A regulatory agency tucked away in the small corner of the Ministry of Petroleum Resources cannot meet the yearnings of the industry.

6. Radical transformation of the port system that would see the ports in Warri, Port Harcourt, Calabar fully operational thereby avoiding demurrage that adds to the pricing template. We are likely to go this route again unless we take the bull by the horn this time around and Now. Peace!!!


by Louis Brown Ogbeifun


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