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Cost, pains of unending fuel scarcity

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Motorists queue at a filling station


Before Yuletide celebration last year, Nigerians began to witness scarcity of fuel. Many thought that the problem would be solved quickly, considering its timing and assurances from government and relevant petroleum agencies.Instead, the scarcity of the Premium Motor Spirit (PMS) has continued intermittently and unabated to the extent that wasting hours in queues in search of fuel is gradually becoming a way of life in Nigeria.

Government and its agencies have given several reasons for the scarcity and efforts towards addressing it, but the lingering queues at filling stations in major cities including Lagos and Abuja have proven otherwise. So, solutions remain elusive. This is because it has been more of blame game between government and its agencies and the petroleum marketers than finding permanent solution to the problem.

While the NNPC has continued to accuse marketers of sabotage and manipulation in the oil sector, marketers have called for complete deregulation of the sector, to allow for healthy competition and efficiency.Some Nigerians, including the marketers have argued that government’s insistence on N145 per litre of fuel is not sustainable, considering that the landing cost, which has also been confirmed by government, is N170 per litre. This disclosure showed that the claim by government that subsidy has been removed wasn’t true.

With the current situation of fuel saga, marketers, black marketers and some filling stations are making brisk businesses at the detriment of many Nigerians who are desperately in need of the product. While some marketers are allegedly diverting fuel and selling above official pump price, some filling stations are sell at night above pump price, after adjusting their metres. Others also hoard to sell to black marketers at night, who resell at higher price.

That is why some filling stations would be under lock and key in the daytime, while black marketers sell fuel beside and in front of it unperturbed. The Guardian learnt that the federal government is not dispose to hiking the pump price of fuel, despite the push by some marketers. It was revealed that it was for this reason that NNPC has remained the sole importer of the product since President Buhari government came to power.Investigation reveals that the activities of the middlemen in the sector is also compounding the problem, because they don’t have filling stations, but they are known for allegedly buying and diverting fuel to the highest bidders in any part of the country.

Nigerians bear the brunt of all these and no one is sure of when the problem will be tackled permanently. This is despite recent promise by NNPC to build more fuel depots across the country to supplement the existing ones that many believe are not enough.Speaking to The Guardian on the development, a Lagos-based businessman, Mr Oke Okodu said that the intermittent fuel scarcity is seriously affecting the economy and human life. “It is time government found permanent solution to this problem. Nigerians are not asking for too much. What is this problem? Is it not a shame that we are crude oil producing country and we are still importing fuel?

“I have a terrible experience over fuel scarcity in the East during Christmas celebration. I was buying a litre of adulterated fuel at N300. The fuel spoilt the injectors of my two cars and I hired a car to bring my family back to Lagos after the celebration.“I spent a lot of money to repair the vehicles. Not quiet long we returned to Lagos, the scarcity started again. Is the scarcity going to continue like this without a solution? That is my worry. Today, there is no electricity supply and there is no fuel to power generator,” Okudo decried.Similarly, a black marketer who pleaded anonymity told The Guardian that he engaged in the business because his sister is a manager of a filling station in Lagos.

“Yes my sister is a manager of a filling station. Whenever there is fuel scarcity, she often supplies fuel to me at normal price to sell at black market at unofficial price. I have made good money from it and that has been the practice for a long time now. I will not stop the business until scarcity stops or my sister no longer work at the filling station.”

Meanwhile, the lingering fuel scarcity has become a source of worry and pain to an average Nigerian. Even as the situation appears to be normalising in Lagos with increased supply of fuel, investigation reveals it is not the same across the country.

Enugu Residents Condemn Fuel Scarcity, Price Disparity
From Lawrence Njoku (Enugu)

Enugu residents said the lingering fuel scarcity has continued to inflict pains on them. While majority of them now live in denial of certain privileges of life to enable them afford the scarce commodity, the product has continued to sell at indiscriminate rates in the state. To buy in any of the petrol stations operated by major marketers at the official rate of N145 per litre, when it is available, one would need to queue throughout the day. Those of the independent marketers however are selling between N190 and N195 per litre without vehicular or human queues. Of worst hit in the entire scenario are civil and public servants, who believe that the rise in price created by the scarcity is seriously eaten deep into their pockets, as their monthly incomes have not improved with the scarcity.

Ikechukwu Ugwu, a staff of the Ministry of Commerce, Enugu, told The Guardian that he had resorted to walking his way to work any time he could not find help somewhere. He stated that from his Gariki residence in Awkunanaw to the state secretariat on GRA, Enugu, he was paying N150, stressing that with the scarcity, he now spends between N280 and N300 daily to his office.

“I have not had additional kobo on my monthly salary since this scarcity started.  I have tried to manage my paltry pay and what this means is that, I walk some distances and use bus services where possible. If I continue to pay the fares, I may not be able to feed my family any longer.“There are things I no longer do and these include curtailing some social activities that I attend. For instance, I am the type that like visiting the public places during European matches and there, I drink as the matches go on. But since this year, I have stopped. I watch football matches from my house, when there is light and when there is no light, I retire to sleep. The way it is, you must curtail certain things, especially those of us whose salaries are stamped to be able to overcome the challenges of this fuel crisis, otherwise, you run into trouble before the next one,” Ugwu said.

Another resident, who simply identified himself as Uchenna, said that he had not run the generator in his house in the past five weeks, irrespective of the epileptic power supply in his area owing to funds to buy petrol.“I cannot be buying at this exorbitant rate for my car and generator at the same time. So what I have resorted to doing is that, I have stopped operating the generator for now believing that the situation will improve one day. With the present rate of fuel, it will take about N2500 to fill the generator tank each time I want to use it but the money is not here”, he said.

A business centre operator, Mr Clifford Emeka, says it cost him N1900 at the present rate to buy a 10 litres of fuel to operate the generator in his office daily. He said the generator has become his main source of power supply due to the epileptic nature of the public power supply. To meet up with the cost, he has to design different price templates for instance, N10 per copy of photocopy with the use of public electricity and N20 per copy with generator. He said that typing services also increased from N100 to N150, the same as airtime for browsing among others.

NACCIMA, Lagos Residents Decry Lingering Fuel Scarcity, Demand Urgent, Lasting Solution
By Tobi Awodipe, Kemi Sokoya, Shakirah Adunola, and Kelechi Okoye

The national president of the National Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA), Iyalode Alaba Lawson, has decried the current petrol scarcity ravaging the country, describing it as a “yearly and unnecessary embarrassment.”

Speaking to The Guardian, Lawson insisted that the lingering fuel scarcity the country has been facing since December last year and which usually occurs during the yuletide season, but has sadly persisted into the new year this time around, points to lack of efficient planning and management of the downstream sector of the oil industry. “It is a big embarrassment to the government and people of Nigeria.” She insisted.

Speaking further, she said, “The effect on the economy of the country can only be imagined. Loss of productive time through long queues at petrol stations by workers and other citizens is a national disgrace to say the least. This has brought about artificial inflation presently, as most consumer goods and services have experienced sharp price increases in this period. Transport has increased by more than 100 per cent.

“Another shock is the avoidable loss which farmers and other agricultural entrepreneurs are facing arising from scarcity of vehicles to transport fresh farm produce to the market on daily basis, leading to unnecessary wastages. NACCIMA is calling on all stakeholders in the petroleum sector of the economy to come up with the right strategy towards solving this perennial problem.”She called on the federal government to challenge the NNPC to get at least 50 per cent of local refineries back to work, while urgently looking for ways of getting the modular refineries in place to complement the major refineries. “This is an urgent and imperative task needed for a lasting solution to this annual, unnecessary ritual of fuel shortage.

“NACCIMA believes that as soon as the government is able to get the local refineries functioning and with other private sector driven refineries in place and the provision of better road infrastructure to support the growth of both rail and road mass transit network, the down-stream oil sector should be deregulated in line with best international practices,” she concluded.In the same vein, a phone repairer, Victor Ehiagbe, complained about hours lost in the search of fuel. “Sometimes, before I come back from filling station after being on queue, the day will be over. I will go home tired and angry. Government should do something urgent about it before many businesses collapse,” he said.

As stylist, Mrs Joy Ezeugo said: “Every morning after taking my children to school, I normally take bus to my shop before 8am. Now, I find it difficult getting a bus in time and it has become expensive. I now pay double the amount for transport fares. Even at home, there is no light for days and my generator has been at home wasting because there is no fuel to buy. All the filling stations around my area are no longer selling.”Tony Adelaku, an undergraduate student, said,
 “I need light to read for my examinations but for the past one week I am yet to see light.
I now read with rechargeable lamp which is not good for my eyes because getting fuel to power the generator is now difficult even the ones selling are expensive and the cost of transportation has doubled.”

Mr Jude Okoye, who lives in Iyana Ipaja, said: “I have to drop my car at home and enter public transport with my family because of the long queue at every filling stations. Almost all the filling stations are selling N175, or N200. Before I could get filling stations that are selling N145 but is always difficult now so I prefer to use public transport. The government really needs to put an end to this fuel scarcity,” Okoye said.For an applicant like Daniel Favour, the scarcity has increased her spending on transportation, while Tiffany Ubah has restricted her movement to avoid spending much on transportation.

Also speaking, a farmer from Bauchi State, Muhammad Awwal, said that the scarcity has not only made life difficult for farmers, but has also caused a significant drop in human productivity, huge strain on the economy, as well as food security.“The scarcity of petrol is making work difficult for farmers, during the dry season, we normally use petrol to run most of our machinery in the farm, most especially the irrigation equipment. Likewise, buyers that do come to farm to buy our products are complaining because the cost of transportation has doubled. They are complaining of increase in the cost of transportation making us to have low patronage and waste of farm produce. The increase in the cost of transportation of goods by these traders has led to an increase in the price of the products.”

A teacher, Abiodun Shittu said that the scarcity has not only made life difficult for Nigerians, but has also caused a significant drop in human productivity. “For a metropolis like Lagos, traffic gridlocks are not strange, but the scarcity of fuel has led to long hours of traffic gridlocks. The scene of long queue of vehicles at any filling station that is selling fuel is always chaotic. Sometimes, queues spill over to a very long distance miles away from the entrance of the fuel station and onto the main roads, thereby, causing obstruction and traffic gridlock.”To Bolaji Akeem, a Danfo driver, the situation has adversely affected the transport system leading to an unprecedented inflation in the charges for basic goods and services.

Speaking to The Guardian, a trader at Oyingbo ultra modern market, Sikirat Folusho, said that she buys fresh tomatoes and pepper from Mile 12 market and the fuel scarcity has made the commercial buses to increase the transport fare. This she said is not good for business as she is not able to cover the cost of items she buys after paying high fare for transporting the goods to Oyingbo.A student of the University of Lagos, Juliet Samson said she comes to school from a very far distance. She said she was used to spend #300 on transport fare but that is no longer the case as she spends double now.

A commercial bus driver, Dennis Dike said that the filling stations are not helping the matter by hoarding fuel when they should be selling. He appeals to Nigerians to be kind to each other.”We cannot continue to blame the government for everything. The filling station owners should come to an agreement on how to go about the fuel issue so that Nigerians can have peace. The transport fares have increased because we spend so many hours at the filling station to get fuel. Sometimes, when the product is not available, we opt for black market. Everyone knows the sharp practices at black markets.”

A staff of an undisclosed bank, Benjamin Chukwu, lamented the recurrent crisis of scarcity in a country where crude is produced. He said that it is unfair and totally unacceptable. He added that in the midst of this scarcity, salaries are still the same. “Some people have had to accept a salary cut or be sacked. A lot are jobless. It is bad enough that a lot of youths are jobless. We shouldn’t be subjected to such manmade hardship as scarcity of fuel in the midst of plenty crude oil.” He further appeals to the government and all stakeholders in the oil industry to reach a compromise and save Nigerians from this situation.

Ondo Residents Fault Akeredolu’s Task Force
From Oluwaseun Akingboye, Akure. 

IRONICALLY, the efforts of Ondo State governor, Oluwarotimi Akeredolu to stop petrol marketers from selling the product above the official price so as to cushion the effects of scarcity on the people, have generated criticisms against the state government. Many of the commuters and petrol users who spoke to The Guardian said the situation, which they noted had started abating after the new year celebration, had been aggravated by the state government policy. 

Ajike Abdurasheed, a seamstress in Oke-Ogba said the price of fuel had started reducing from N220 to N170 per litre some days ago, and people were hoping that it would get back to normal price.”But now that government and DPR have started arresting the petrol stations selling above N145, all the filling stations in the state have shut down and there is no where to buy petrol in the state. 

“Sometimes, we go as far as Ikere Ekiti and other neighbouring states to get this product at very exorbitant rates ranging from N200 to N250. And that’s even if you are lucky to get it so that hunger will not kill us.”A taxi driver, who simply identified himself as Odunayo, lamented that he has been out of work for some days, because there was no where to buy petrol to operate his commercial vehicle. 

Odunayo, who revealed that the unemployment in the country made him to dump his degree certificate and take up driving for survival, added, “even if we resort to purchasing black market, the passengers will complain of the hike in transport fare.”The Guardian correspondent boarded taxi from Adegbola to Orita Obele Estate, which used to be N50 per drop, and in each of the trips, there was great commotion and argument between the drivers and passengers because of the fare increment to N100. 

“We don’t know why Aketi (Governor Akeredolu) is adding more problems to our hardship ooo. He should have allowed this people to sell what they buy now. Abi, how can someone buy petrol for N170 at the depot and you expect him to sell it lower? “In fact, this APC government has purposely come to suffer us in this country. Buhari said petrol will be reduced to N45 per litre during campaign, but now sold at N200 or more; and that’s if you even get it. We are tired of this All Promises Cancelled party o,” the commuters complained in the car. 

The situation worsened when the only two major marketers, Matrix and Bovas stations who had been selling PMS for N145 since the scarcity started last year ran out of stock. The duo had fuel, and they were selling to people, even when NNPC did not have.Meanwhile, Governor Akeredolu embarked on stringent measures to end fuel scarcity in the state by forcing independent marketers to sell Premium Motor Spirit (PMS) at the official price of N145. He led a special monitoring team across Akure metropolitan city on Monday night, catching some petrol stations, which sold the product to customers between N180 and N190 unawares.

Kudos To DPR Adamawa, NNPC Is The Source Of Fuel Scarcity, Says Atabo
From Emmanuel Ande, Yola 

The Managing Director and chief executive officer of Silver Aluminum Roofing Sheets Manufacturing Company, Yola, Adamawa capital city, Chief Joseph Atabo, has commended the efforts embarked upon in Adamawa State by the Department of Petroleum Resources (DPR) to alleviate the fuel crisis in the state, shifting the blame of the products shortage to Nigerian National Petroleum Corporation (NNPC) management.

Atabo who spoke to The Guardian in his office over the hardship his company is going through as a result of the fuel crisis, said that DPR officials in Adamawa State has put so many measures on ground to cushion the effect of the scarcity among the motorists and manufacturing companies.”Why I blamed NNPC for the crisis and commended DPR Adamawa state office is that DPR is only a regulatory agency, it controls prices to ensure that marketers comply with government approved prices, it ensures that petroleum products are of high quality and also safety. But if NNPC did not supply, what is DPR going to regulate? For me, the only government agency that is effectively working under president Muhammadu Buhari’s government is DPR. Why am I saying so? If their is supply in Adamawa you see DPR staff attached to those filling stations to ensure that the price is not jacked up and that is very good, but the supply is not enough,” he stated.

Atabo who said that fuel is the pillar of manufacturers in the country, lamented that his raw materials are trapped in Lagos and Onitsha as a result of high cost of transportation in the southern part of the country due to fuel scarcity.”We in Adamawa state are lucky, the cost of transportation is not as high as in the south since people we are still getting the products at government prices and even the so called black marketers filling stations are not on the high side, because they know that if the officials of the regulatory agency (DPR) in the state discovered them they will lose the entire products,” he said.

Scarcity Takes Toll On Abuja Residents, Economy
From Kingsley Jeremiah, Abuja

In the early hour of yesterday in the capital city of Abuja, a young lady, who identified herself as Perpetual Ocheje was in hot argument with a trader, Nwachukwu Uche. Ocheje had gone to buy a dozen of spoon, which was selling for about N150 only to discover that the price has gone up by close to 100 per cent to N250.“I can’t talk. That is the last price. You may leave and price elsewhere,” the trader, who seems to be angry told the customer.
   
“Are you not in the country? Do you know what fuel is selling right now? Despite the fact that the prices of these goods are increasing in the market, the cost of transportation from Onitsha to this place is like three times of what we use to pay,” Uche said.The next customer, who walked up to his shop in the Gwarimpa area of the city was also disappointed. He had planned to buy a mobbing stick, only to discover that the price had gone up from about N300 to N500.
  
Like Ocheje and Uche, consumers and business owners in the country share in current lingering fuel scarcity across the federation.With no solution insight, Nigerians expressed concern that the adverse effect of the situation on the economy may escalate since the crisis is not receding.A Legal Practitioner, Faith Inelo, who recently started job in Kano, admitted that her outlay on transportation within the city has increased, reducing the worth of her total take home.  
  
Inelo said: “I use to pay about N300, it has jumped by about N200 and most time, it is very difficult to get vehicle. The petrol queue across the city is still long and stations are selling above the normal price.”The Federal Government through the Ministry of Petroleum Resources have confirmed that Nigerians may not see solution to the fuel crisis soon as most tactics deployed by the government seem to have defiled solutions. leave queues and pump price uncontrollable.

An entrepreneur, who manages Causal Clothing Limited in Abuja, Ejiga Ibrahim said though the period was usually the peak in his sales, the company’s income dropped drastically as firms around him closed down due to the fuel situation.“We disappointed so many customers in recent times because we could not get fuel to power our operations. This is really bad for business.”The Manufacturers Association of Nigeria had said at least 222 small-scale businesses have closed shops, leading to 180,000 job losses in recent time, Ibrahim said: “We spend more on generator; this is a reduction to our gains. We are supposed to pass this to customers but they are complaining about the situation of things in the country. A lot of small businesses are closing. We are the ones suffering.”
  
Energy analyst at PWC, Pedro Omontuemhen worried that the cascading effects of the persistent supply shortfall remained a timed-bomb.The Guardian gathered that motorists spend an average of two hours on queue across the country before they are able to fuel their cars.The lost hours, according to Omontuemhen would have translated to productive working if government had summoned the courage to address the challenges in the downstream sector and assuage the plight of Nigerians.
 
“The hours we spend at the station are hours away from and productive ventures. Nigeria cannot be producer of crude and yet be a gross importer of refined products. We need to refine our crude. We are loosing value all across the whole chain.“The cost we are bearing is obvious. We spend in the stations. We are buying fuel at expensive price. More businesses that cannot cope are closing down. These will have negative multiplier effect on the whole system. Unemployment is on the increase. Crime rate will be high,” he said.
  
Chief Executive Officer of Amco Travel and Tourism, Ahmed Muhammed Sani, said the fuel crisis has added to losses by his organisation, worsening the operating business environment in the capital city.“It is very sad that the situation is not retreating. Ordinarily, December and January attract a lot of expenditure but the fuel problem has made the situation worst. We rely on black market to fuel our operation.”A commercial driver for Uber, Ikenna Nwosu said he has had to park his vehicle because he is not making gains on his daily operations.“I have to buy black market or stay on long queues for long hour,” Nwosu lamented

Scarcity Has Pushed Up Cost Of Production, Says MAN President
By Daniel Anazia

For the Manufacturers Association of Nigeria (MAN), the incessant scarcity have obviously pushed up the cost of production, as the cost of fueling the generating sets has also gone up due to poor public power supply.

According to the President of the Association, Mr. Frank Udemba Jacobs, the crisis has also caused some dislocation in production as workers that are supposed to come work are unable to do so.“Generally, the perennial scarcity has always affected the manufacturing sector and every other sector of the economy. The crisis has plunged businesses into difficulties making overall operating environment less competitive. We are not happy about it, but it is one of those things that we have to deal with,” he said.

Asked how much in real value members of the Association have lost to the scarcity crisis, Jacobs said: “It is too early to assess that because it takes a while before secretariat can contact its 2,600 members to furnish it with figures and then come up with data.” On the way out, the MAN President said: “We have consistently told the government that there is need to privatise the refineries because we believe that government has no business in business. If the refineries are managed by the private sector, they will produce profitably. There will not be anything like scarcity of fuel.

“Dangote, one of our members is working on a petrol-chemical refinery that will come on stream in 2019. I’m sure the moment that is up, the scarcity challenge will be over. Government should privatise the four refineries— Warri, Kaduna, and two in Port Harcourt. If these refineries are functioning, I don’t think we will be having fuel scarcity challenges like we do in the country,” he added.

Also commenting on the crisis, the Director-General, Nigeria Employers’ Consultative Association (NECA), Mr. Olusegun Oshinowo, said the issue of fuel scarcity in an oil-producing nation like Nigeria has become a big shame, adding that it is symbolic and demonstrative of the failure of government right from the time of the late General Sani Abacha to the present government. He noted that successive governments have consistently preferred to choose politics over right policy and economics, stressing that it the reason the country has been almost perpetually knocked down in the vicious cycle of fuel scarcity.

According to him, government has been very unclear about its deregulation policy on PMS. Though, it did declare deregulation not long ago of the PMS market, but it never allowed market forces to hold sway.The NECA DG also stated that even when Petroleum Products Pricing Regulatory Agency (PPPRA) template was indicating a landing price much higher than the pump price, everyone was still compelled to sell at the regulated price.


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