The current scarcity of petrol in the country and the non-availability of the redesigned naira notes have left many people with different theories about what is happening to the nation’s economy. ADEYINKA ADENIJI takes a look at the lingering crisis and what is being done or not done to resolve the issues
The prolonged scarcity of Premium Motor Spirit (PMS), also known as petrol is not only one out of many of the crisis plaguing the nation, it has become ‘one too many’. Numerous factors and indices have made the four months old crisis unique. Though reasons abound and are not hidden for this assertion, but principally, the timing of the lingering debacle has contributed to the severity of its venomous bite on the socio-economic life of the citizens. Sadly, governments’ artificial efforts at keeping the price of petrol within the reach of the poor masses of Nigerians had become cancerous in the country’s finances.
Similarly, the failure of government to meet up with its responsibilities in terms of the provision of social services has been traced to the trillions of naira allegedly expended on subsidy for petrol importation. While the Nigeria National Petroleum Company Limited (NNPCL), says most of the problems are not about the availability or otherwise of the product, Nigerians continue to wallow in abject poverty, as inspired by a shortage of the product. Major challenges advanced by NNPCL as reason for the scarcity have to do with distribution and not availability of products. While the crisis in the Nigerian petroleum industry have long become perennial, year in, year out, Nigerians wallow in economic hardship informed by high cost of goods and services as a result of incessant increase in pump prices of petroleum products.
Each time there is scarcity of products, which are mainly imported because the nation’s refineries are comatose, the response of prices to market forces creates room for all sorts of sharp practices on the part of operators in the sector. This results in untoward hardship as general price of goods and services always climb simultaneously, in response to the artificial interactions created between forces of demand and supply.
This renders minimum wage lifeless as it ends up falling short of sustaining the lives of citizens. The group Managing Director of the NNPCL, Mele Kyari, had mostly attributed some of the problems to distribution. While briefing newsmen recently the state of things, he said: “We have a distribution problem”. According to him, “these distribution problems” are a result of some market realities, which come up as a result of the glitches happening in terms of logistics in the distribution channels.
He explained that there had been significant changes in the value chain from the movement of products from the mother vessels to the terminals and from the terminals to the petrol stations where the public could access the products. Though many consider his explanation an excuse that signals nothing but a manifestation of the outcome of mediocrity, for the NNPCL GMD to wake up after years at the helms of the affair; and after several failed public promises of abundance, to wake up in the middle of such a crisis that has become a national embarrassment and blame the “lack of adjustment mechanism to respond to changes due to the subsidy regime”, as according to him, unscrupulous operators took advantage of glitches in the system by escalating the situation beyond the reasonable, in the name of recovering costs.
While the NNPCL blames operators in the distribution value chain who take advantage of the distribution challenges, one of which is the need to load at least 1800 petrol trucks and get them on the road to various destinations across the country, the citizens appear too impatient as all they seem concerned about is being able to fuel their the tanks of their cars and power their generating sets in an economy where electricity supply is rarely expected. While authorities through the various agencies embarked on some monitoring exercises to ensure affordable products in the gas stations, checks reveal that not much may be achieved in terms of sanctity in the pricing of the products, as the partial deregulation of the downstream sector is also explored by some operators to fleece the public of the benefits of government-sponsored subsidies.
The disparity in price regime, which places some marketers at unmatchable advantages over others have also been usurped by some in perpetrating the evil of shortchanging the national economy. A tanker driver who spoke under condition of anonymity to our correspondent about the ordeal of players in the petrol distribution value chain said the product can never be the same even as the queue is gradually fizzling out. The driver also heaped the blame for scarcity on the government, “The authorities must ensure a steady supply. “Once there is supply, which may never be regular until Nigeria returns to the refining of products locally.
“One unsolvable reason for the difference in prices is the ‘major and independent markets dichotomy’.” A petrol station manager, whose station is an outlet of the NNPC, said he can no longer sell as a major marketer outlet because of issues bordering around the renewal of franchise with NNPC. Major marketers are largely the bigger players, mostly multinationals who import fuel directly through the government, while independent marketers are those who buy from importers. “How can you sell at the same price as someone who sold to you in the same market?” He asked.
The station manager who had not sold fuel for months because of difficulties in sourcing products said, “the last time we sold, people insulted us here for selling above the official rate. They took us for an independent marketer because they see NNPC,” the 40 something-yearold said as he pointed to the signpost at the edge of the expansive petrol station on the Lagos-Abeokuta Expressway.
Those who do not mind believing the explanation offered by the NNPCL GMD, that ‘products are available but distribution is the problem’, have however found it difficult to discountenance the effect of the falling value of the naira and recently introduced Central Bank of Nigeria (CBN) currency remodeling and old notes swapping policy on the lingering fuel shortage crisis. Among other motives, money is held for transactional purposes, and so the primary purpose of the naira had almost eroded through the implementation of the swapping policy, just before a Supreme Court pronouncement that the CBN should stay the deadline for the validity of the old notes.
Though the policy affected every facet of the socio-economic life of the people, so much so that frustrated Nigerians result to violent engagements with banks as naira notes become the faces of a masquerade; peculiarities of the PMS retail sector did not only rendered Nigerian people vulnerable to manipulations from fraudulent operators, there had equally been growing anxieties over the fear of being caught in the web of politics, as evidenced by the barrage of political brickbats around a policy supposedly to be purely a fiscal matter.
While unscrupulous operators have been caught in the act of fleecing desperate fuel seekers of their hard-earned money by cashing in on the shortage of naira notes to inflate prices, those involved in the fleecing are also afraid of one day waking up with caches of expired millions of naira notes.
Disheartened Nigerians are full of unpleasant testimonies in the hands of these petrol attendants, fuel station managers, and owners in their bid to acquire the products. One Folorunsho Olumide, who shared his experience during a discussion about the ugly experience of Nigerians and the twin headaches of fuel and naira scarcity narrated how he was left with no other choice than to buy petrol exorbitantly rather than be robbed in broad daylight. In his words: “I went to buy fuel at N250 per liter. The attendant insisted I pay in cash. When he knows there is no cash in town. “They have POS, but instead decided to turn it into another business within the business of paying them.
They were going to charge me N1,000 for every N10,000 worth of petrol I buy.” Olumide said as he queried which account they wanted him to record the “extra cost of spending” his money. Olumide said he angrily left the place for another station where he eventually bought for N350 per liter. At a filling station in Ogudu, Chinemerem Okafor, a computer specialist said he decided to conserve resources and work from home and needed petrol to power his generator. His 27 liter capacity jerrycan has been filled with the PMS before he was informed of an extra N1,500 charge for every sale other than into vehicle tanks. According to Chichi, as the engineer chooses to be addressed, it took the intervention of onlookers who helped resolve the issue. He said he ultimately parted with N500 as the cost of paying for the petrol he bought.
Meanwhile, initial fears among petrol sellers concerning the fear of being caught up with the deadline on old note swapping were renewable until criminal elements began to show their typical tendencies after they were found to turn the unfortunate situation into another money-spinning venture. Mr. Kolapo Shakiru is a POS operator, who engages in the transfer and withdrawal of cash for a fee. He says the issues around the implementation of remodeling and swapping policy had generated to a state whereby operators had to source cash, the commodity traded in his line of business from petrol attendants who sell them the cash, insisting on selling with either cash or at a charge to motorists. “We buy from filling station attendants since we can no longer get cash from the banks.
“This business cannot survive with the cashless policy,” said Gbenga who declined further comments on other sources of his stock – naira notes. For Christiana Ajewole, an ‘awaiting WAEC’ POS operations attendant, the petrol stations operators come to his boss’ and have been the live wire of business since December when the effects of the CBN promoted cashless policy began biting harder.
“My boss buys from filling stations,” said Christy. Based on explanations offered by the 17-year-old, operators are neither finding the situation palatable as she narrated an instance where she also rendered the service at a loss because her boss did not give her clear instructions as to the cost of buying the naira. She had bought N100,000 at the cost of N7,000. Meaning that her outlets must sell at about N1,000 for every N10,000 withdrawal to make about N3,000, representing about 30 percent, which according to her, though sounds unreasonable but for which operators may not be justifiably condemned. Borrowing the words of Dr. Mele Kyari, the NNPCL GMD, it is unarguable that operators cash in on glitches in the system to perpetrate evil, which worsens the constantly bad situations in the up and downstream sectors of the petroleum sector.
This, however, must be clarified to avoid the ambiguity of profiling in identifying the cause of the lingering crisis that has threatened the upcoming general election. Meanwhile, if glitches cannot but be annexed to serve clandestine interests, either through commission or omission; uprightness, on the part of policy formulators remains the only saving grace, to envisage the plucking of loopholes in a way that will always ensure effective percolation of the intended benefits alone.
As earlier stated, the coincidence of fuel with naira scarcity has also raised some conspiratorial deductions, which have also found expression in some utterances on the political landscape. Mainly, politicians have spoken of the ills of a swapping policy amidst lingering petroleum supply shortage.
A sitting governor was reported to have alleged that elements not far from the country’s president who also doubles as Minister for Petroleum have a hand in the present confusion. Governor Nasir El-Rufai of Kaduna State and a strong supporter of the flag bearer of the All Progressives Congress (APC) in the forthcoming presidential elections, coming up in few days’ time, Asiwaju Bola Ahmed Tinubu, had alleged the presence of “elements in the presidential villa” who are out to sabotage the party’s chances at the fast approaching polls. His statement was received as a clarification of a veiled reference to the presence of a cabal who are out to cash in on glitches to perpetrate wicked interests against the already impoverished citizens.
The election period certainly has added to the pains experienced as a result of poor implementation of policies and management of the petrol scarcity crisis. Addressing the mammoth crowd of supporters in Abeokuta in January, on the podium with his vice presidential candidate and former governor of Borno State, Kashim Shettima, his wife, Oluremi, and other party bigwigs, Tinubu declared categorically that the lingering fuel crisis around the country and the introduction of new naira notes were a plot to sabotage his chances at the presidential election. He however vowed to end the scarcity of petroleum products if elected into office on February 25 “Let fuel be expensive; only they know where they kept it. Keep petrol, keep the naira, we will vote and be elected. You may change the ink of naira notes. What you expect will not happen. We will win.
They thought they could cause trouble; they sabotaged fuel, but with or without fuel, with or without motorcycles and tricycles, we will vote and win,” said the former two-term Lagos State governor. His utterance though was not denied by the Presidency, laid to rest, claims by Dr. Kyari that the scarcity was a handiwork of economic saboteurs who latch on to the failure of authority to put in place the right mechanisms to ensure uninterrupted supply of petrol.