Fuel scarcity: What we should know!!!

The on-going fuel scarcity has brought numerous reactions from the public with scourge of pain inflicted on the public by the queues created at filling stations. Much promises has been made to salvage the situation, but not much has being done. Verdtalks, took it upon themselves to make a little research about what’s the cause of the current fuel scarcity.

From The Vice President, Prof. Yemi Osibanjo, here are his statement about the cause of the scarcity;

‘’I think that part of the reason why you find these disruptions at the end of the year is because of what we described as this winter phenomenon, where prices of petroleum products go up in the winter month in many parts of the world, obviously because of the places where we are getting the PMS from and the situations out there at this time. Obviously that gives rise to problems of those who are bringing in fuel, and we had one or two short deliveries on account of some of these problems. So clearly, what has happened here is that on account of some of the short deliveries that we have experienced, panic buying, hoardings in different places started. So those are largely the issues. So we are also trying to ensure that these sorts of disruptions won’t happen in the future and that’s one of the reasons why we are spending a bit of time to look at some of the issues. There’s a premium on products. That’s what it usually would happen at the end of the year, but if you notice it didn’t happen last year at all. We had a very smooth December 2016, there was no disruption whatsoever; it all went very smoothly. So we can actually take care of those situations. It is when you have a problem, a disruption that you usually would find the hoarding. That’s what you are seeing today, we are seeing a bit of hoarding and the DPR has been going round the stations trying to regulate that and, in some cases, have to close down the stations and force the petrol stations to continue to sell. So really all that can be done is regulation, and more enforcement by the DPR, which is what the DPR has attempted to do. But l think the ultimate solution is to have adequate supply going everywhere. Once you have adequate supply everywhere, the hoarding and disruption will stop’’.

But contrary to the Vice President claims, is the statement of the Executive Secretary for Depot and Petroleum Products Marketers Association (DAPPMA), Mr. Olufemi Adewole who said, "The NNPC imports and distributes products through DAPPMA, Major Oil Marketers Association of Nigeria (MOMAN) and Independent Petroleum Marketers Association of Nigeria (IPMAN). Our members pay NNPC/PPMC (Petroleum Products Marketing Corporation) in advance for petroleum products and fully paid up PMS orders that have neither been programmed nor loaded are in excess of 500,000 metric tonnes (about 800,000,000 liters) as at today and enough to meet the nation's needs at a daily estimated consumption of 35,000, 000 liters.

Our members' depots are presently empty. However, if the NNPC /PPMC provides us with PMS, we are ready to do 24 hours loading/truck out to alleviate the suffering of Nigerians until the fuel queues are eliminated," said DAPPMA. The association maintained that the NNPC has been the sole importer of the product since October for various reasons.

Among these, DAPPMA said, is the fact that the country currently runs a fixed price regime without any recourse to subsidy claims. It noted, however, that the international price of crude oil is beyond its control. DAPPMA stated that the current price of PMS is about N170 per liter, with the NNPC, importer of last resort, absorbing the attendant subsidy on behalf of the Federal Government.                        

"We understand that NNPC meets this demand largely through its DSDP platform framework. However, due to price challenges on the DSDP platform, some participants in the scheme failed to meet their supply quota of refined petroleum products, especially PMS, to NNPC. This is the main reason for this scarcity," explained DAPPMA.                          

It added that the current exchange rate of naira to the dollar is N306 for PMS importation, stating that banks also charge interest at a rate above 25 percent.

Nigerians are now left in a straight on what and whom to believe on the cause for fuel scarcity. Whether NNPC doesn’t have enough to make supplies to other oil marketers because of the hike in price from the international market or, oil marketers are hoarding available fuel to compensate for the additional price the bought for the fuel gotten at #170.

But whoever has the truth about this issues, Nigerians demands urgent action to be taken on the current fuel scarcity

Arira Joseph, 

Co- Editor Verdtalks.