The scarcity of petroleum products in Nigeria has been a raging nightmare that Nigerians have been living with over the years, one of several man-made epidemics plaguing the country! Where did we go wrong and what can be done to right these wrongs?

Nigeria has four petroleum refineries spread across the country. These are the Kaduna, Warri, Alesa-Eleme and Port-Harcourt Refineries, all subsidiaries of the state owned Nigerian National Petroleum Corporation, NNPC. These refineries, in between them, can produce about 20 million litres of refined petroleum products daily and these products are broken into Premium Motor Spirit, PMS otherwise referred to as Petrol, Dual Purpose Kerosene, DPK known as Kerosene and Automotive Gasoline Oil, AGO referred to as Diesel. Nigerians consume about 40 million litres of these products daily implying the combined production capacities of the four refineries at full throttle can serve half of the demand. The four refineries are currently producing at less than 60% installed capacity implying the over 140% extra demand will be imported. As if this is not bad enough, all the twenty-two petroleum products depots owned by the Pipeline and Products Managing Company, PPMC are underutilized due to their dilapidated state. Added to these setbacks are pipeline vandalism (DrillBytes of 23-12-15), illegal oil bunkering (DrillBytes of 30-12-15) and hoarding (DrillBytes of 06-01-16). The importation of petroleum products was, at the onset in 1998, supposed to be a temporary arrangement to cushion the effects of the scarcity while government takes steps to rehabilitate the entire structure of the NNPC and its refineries. It appears to have become permanent!

Gradually, independent petroleum marketers were licensed by the Directorate of Petroleum Resources, DPR to import petroleum products to augment local supply. Soon enough, the marketers started building their own depots to store petroleum products and finally, issues of foreign exchange disparities in the ever fluctuating international market price of petroleum products vis-a-viz government approved pump price in Nigeria, a hitherto unknown variable in the whole package, became a constant. Before consumers could comprehend the emerging drama, petroleum subsidy became the sing-song of marketers to the consternation of informed Nigerians and the confusion of economically deformed Nigerians. So serious was this issue of subsidy that it brought the country to a standstill in the occupy Nigeria protests of January, 2012. Before long, government started spending millions on Petroleum subsidy, and then billions followed by trillions then, billions and now, removed. Yes, the well intentioned subsidy policy manipulated by a fraudulent few has now been removed and with it, the associated headache.

The petroleum products distribution network is structured to the advantage of the marketers and disadvantage of the state with its people. Each time the marketers feel threatened, they shut down their pumps, consumers open their mouths in lamentation while the economy suffers a setback. Most times, amid fuel scarcity, the marketers have more than enough to last the country for over a month! We are all at the mercy of petroleum marketers even though different grades of fuel are imported. A 10 litre fuel in one pump sometimes will render the services of 5 litres while a 10 litre in another will probably deliver an equivalent service!
The Group Managing Director, GMD of the NNPC; Dr Ibe Kachikwu promised reforms which include but are not limited to the complete overhauling of the four refineries and rehabilitation of the 22 petroleum depots across the country. While the turn-around maintenance is ongoing, the country must continue to dance to the whims and caprices of the petroleum marketers and give them what they want in order to get what it needs! Alternatively, ending the subsidy plague is for the NNPC to be the sole importer of petroleum products. That way, NNPC can sell to independent marketers at a fixed Naira rate while NNPC and the marketers dispense at government approved price. Some stakeholders have submitted that there is no point keeping the refineries and NNPC itself, stressing that all government agencies must be sold off to keep faith with a free market economy and end the subsidy trial. While DrillBytes is not, in any way, averse to the privatization of government assets, it must be seen to be done transparently with a human face. We all saw how shabbily some government assets were hurriedly unbundled like sliced bread in the past, and sold off only to fleece consumers in the present. Ikeja and Eko Discos (Power Distribution Companies) can do better but Ibadan Disco is the worst in the South-West, charging more for darkness distributed than electricity denied! The National Electricity Regulation Commission, NERC has done little if anything, to translate regulations to relief. We should not allow the NNPC go this way!

In conclusion, for as long as we depend on imported products through third parties like the independent petroleum marketers, recurring fuel scarcity will subsist. Removing the subsidy is good, making sure marketers do not fleece consumers is better but ensuring fuel scarcity does not return is best. Therefore, the state, through the NNPC should be the sole importer of petroleum products and end the fuel crisis or unbundle the NNPC, privatize it as quickly as possible while encouraging private participation in refining. By the time Nigeria is able to produce its local consumption of petroleum products, subsidy will disappear and with it, the pains of scarcity.The Ministry of Petroleum Resources through the NNPC must give fuel scarcity a one way ticket to oblivion!

Kayode Adeoye is an energy expert in Lagos.