How new forex policy, others trigger fuel scarcity

FUEL scarcity, which suddenly hit major Nigerian cities, especially Lagos and Abuja, on Saturday continued yesterday, as long queues were observed in filling stations yesterday. 

    Expectedly, the APC Presidential Campaign Organisation (APCPCO) criticised the Peoples Democratic Party (PDP)-led Federal Government for failing to specifically ‘contain’ the scarcity in the Federal Capital Territory (FCT) Abuja and some parts of the country; the organisation condemned the ruling party over gross deficit in power supply across the country.

    This came, even as condemnation trailed the new foreign exchange (forex) policy of the Central Bank Nigeria (CBN), which is said to have  given rise to the fuel scarcity being experienced in some states.

  The new policy is said to have constrained the petroleum marketers from raising funds for importation of products, even as they lobby to secure their N264 billion outstanding subsidy claims from the Federal Government. 

  When The Guardian visited some petrol filling stations in Lagos metropolis, long queues were seen, as operators said that the cause of the scarcity was still sketchy. 

  An attendant at a filling station in Bariga, who didn’t want his name in print because he was not authorised to speak with the press, said that the station had not sold petrol for the past three days as tanks were dry and queues mounting.

  “I don’t know what exactly is the cause of the scarcity, but we hear that at the depot in Apapa, only tankers belonging to Nigerian National Petroleum Corporation(NNPC) and multinational companies and others heading to the north are being loaded, causing other marketers to find quick fixes or be knocked out of business.”

  In Isheri-Igando area of Lagos, fuel sold for N100 per litre as against the N87, an action an attendant attributed to high cost of the product at the NNPC Depot. 

  In Ogun State, motorists experienced hard time yesterday as the scarcity bit harder and partially paralysed vehicular activities in the state.

  The scarcity has also begun to inflict pain on motorists, as passengers, especially those going to or returning from church programmes, were stranded at major bus stops and motor parks.

 Indeed, long queues surfaced at major filling stations across the state, forcing many of them to close shop, while those running skeletal operations dispensed fuel above the normal pump price.

  Out of over 50 filling stations on the Sango/Abeokuta Expressway axis, only 10 were dispensing fuel. Of these numbers, only two were selling to motorists at normal pump rate; others are selling at N100 per litre and above.

  Commuters were stranded at major bus stops, while transportation fare had been jerked up tremendously.

  All filling stations in Sango, Ifo, Arigbajo, Papalanto, Ewekoro to Obada Oko, all within the state, around noon were shut, but information from Abeokuta revealed that the few stations dispensing fuel were selling as high as N100 per litre, while black market also experienced a boom. 

  In Ibadan, Oyo State capital, many of the filling stations had no petrol, while the few ones selling were dispensing using only  one of their pump.

  A commercial operator at the Oando Filling Station, at Mokola area of the city said that he had been on queue since 9 a.m. before  he eventually bought at 4 p.m.

  The situation was the same at Gate, Challenge and Iwo road areas of the city as motorists spent long hours on queue to get petrol.

  However, this was not so for diesel as many of the filling stations had the product to sell to customers.

  An employee of the Oando Filling Station, who spoke to The Guardian on the development, said that they could not load products from the depot and they had since exhausted the ones they had in their reserve.

  The source, who pleaded anonymity, added that the station had been trying to load products since Monday and only managed to load one on Saturday.

  The CBN, had recently closed the retail Dutch Auction System/wholesale Dutch Auction System (rDAS/wDAS) segment of the foreign exchange market and quoted an exchange rate of N198/US$1.00 as the official selling rate, inferring a devaluation at the interbank FX market.

  This development was prompted by serious pressure on the naira at the interbank market. The naira, at the inter-bank market now sells for N198 to the dollar.

  The apex bank also banned the commercial banks from re-selling CBN dollars to other banks, an attempt to end speculation in the Naira.

  The CBN, in scrapping its window of direct sale of foreign exchange to end users, said that all foreign exchange needs were to be sourced from the inter-bank market whose rate ranges between N197-N198 to a dollar.

  Some of the marketers have therefore exercised caution before placing order for importation. This has forced many marketers to rely on product allocations from the Pipeline Product Marketing Company (PPMC), a marketing arm of the 

NNPC, which has however assured of adequate supply of products across the country.

  Attributing the queues to shortfall in the system, NNPC’s Group General Manager/ Group Public Affairs, Ohi Alegbe, said that the corporation had injected additional 688 million litres of Premium Motor Spirit (PMS) otherwise known as petrol into the market. 

  Alegbe called on members of the public not to engage in panic buying and assuring that the corporation was working with all downstream industry stakeholders to eliminate the noticeable artificially induced fuel queues in some fuel stations.

  He also warned marketers to desist from hoarding of petroleum products, threatening strict sanctions on defaulters.

  According to him, the NNPC had already increased substantially, the volume of petroleum products distributed to marketers.

  The shortage was due to halt importation of products due to the delay in payment of outstanding N264 billion subsidy claims and interest on foreign exchange.

  An independent marketer who spoke under anonymity told The Guardian that the marketers were not importing due to financial challenges arising from non-payment of subsidy and the new CBN policy on foreign exchange.

  The source said that his company received products about 10 days ago, but there was no follow up for new shipment due to financial constraints.

  “There are problems in sourcing fund, problems in opening letters of credit to finance importation. We don’t have forex, because the CBN has cancelled the windows we exploit for getting forex, so all marketers now depend on whatever CBN puts on the table.

  “Prior to the policy, there was a separate window opened by the government to encourage petroleum marketers on importation, but the new policy put us on the same table with all manufacturers and importers, which is insufficient to go round.