Welcome to the reign of racketeers, fly-by-night contractors
For days it rage: The terror of racketeers and middlemen. They were in embarrassing control of the economy. And no one could tame them. Like the gods, everybody bowed to their wish. They called the shot and decided what happened to Nigerians during the yuletide. Though, they still call the shots days after, however, in a less forceful manner.
The recurring premium motor spirit (PMS), otherwise known as fuel, scarcity in Nigeria, no doubt, has created room for middlemen and fly-by-night contractors to fleece the nation of billions of naira.
The Guardian gathered that racketeering is a big business among the middlemen, who mount pressure to secure the product at any cost. Investigations showed that in most depots, the Authority To Pay (ATP), popularly known as ‘ticket’, usually goes to the middlemen, hence denying the genuine marketers access to the product at N133.28 per litre ex-depot price.
Further checks by this paper revealed that officials of the Nigeria Products Marketing Company (NPMC) formally known as Pipeline and Products Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC), usually take advantage of the acute scarcity of the product to extort the marketers, by selling the ATP (loading ticket) as high as N300,000 per truck.
A source in the Petroleum Tanker Drivers (PTD) unit of the National Union of Petroleum and Natural Gas Workers (NUPENG) Apapa, told The Guardian that some marketers at the depot wait for months to load products, but don’t succeed due to the sordid business between officials of the PPMC and the middlemen.
He stated that some of the marketers paid for the products since September 2017, but they weren’t given, yet those that are willing to buy the ATP, get the product and load their trucks often.
He added that the NPMC coordinators at the depots usually issue the ATP (loading tickets) to their boys, who at the end of every transaction, bring them returns.
According to the source, “some of the officials in Abuja cannot claim ignorant of this sharp practice at the depot. They are aware of the problem, because they used to send people to the coordinators to issue them the tickets. Just the same system they have been allocating the other products like kerosene and diesel.”
During the yuletide, the pangs of fuel scarcity hit so hard that many did not leave their homes, even to worship in their respective churches. Many homes were without light and water, as families rationed the fuel at home.
Worsestill, there was price disparity in the filling stations across the country such that people trecked long distances to get the absent fuel. This led to a series of accusations and counter accusations by the Department of Petroleum Resources (DPR).
The Independent Petroleum Products Marketers Association of Nigeria (IPMAN) and Depot and Petroleum Marketers Association of Nigeria (DAPMAN) suffered most from DPR’s antics. In fact, so many filling stations that sold above the stipulated pump price were shut.
Many Nigerian also accused the Independent Petroleum Products Marketers Association of Nigeria (IPMAN) of trying to rip them off with a ploy to bring in new price regime for petrol.
It was gathered that scarcity crisis was as a result of hike in ex-depot prices of fuel by the Depot and Petroleum Marketers Association of Nigeria (DAPMAN).
A situation that has led to some form of racketeering and emergence of super rich middlemen and fly-by-night contractors.
A depot worker, who pleaded anonymity, said that they did not get supplies from NNPC, forcing marketers to source products from private depots at exorbitant prices.
“So, how can we buy at high price and you expect us to sell at normal price? If we buy at government-approved price, we will sell at normal price.”
He said, “when they were busy monitoring or sealing off stations that were perceived to be hoarding, I just laughed.”
He said there were some peoplle, who acted as intermediaries that were busy adding their own charges to the official price.
While not absolving government from the scarcity, he condemened some marketers, who were diverting products to states that could buy at high price, worsening the situation.
He added, “if the product is available at PPMC depots nationwide, IPMAN members will sell at official price of N145 per litre.”
He noted that N145 is not profitable at the current exchange rate; the government must intervene to enable marketer’s access foreign exchange at a special rate.
Assistant Director, Retail Outlets Monitoring, Downstream Division, DPR, Mrs. Ijeoma Otti-Onyeri, and Chairman of Ejigbo branch, IPMAN, while speaking at different fora in Lagos, disagreed on claims that the private depot increased their ex-depot prices.
Speaking with the Chairman Lagos zone and Ejigbo Satellite branch of IPMAN, Alhaji Balogun Alanamu, he said the NNPC and DPR should be blamed for the fuel scarcity experience in the country, adding that only one storage tank out of nine installed at the Ejigbo Depot is working.
He appealed to the NNPC to revamp all the moribund storage facilities within the depots, which made up the western zone to enhance effective distribution of petroleum products, stressing that the rehabilitation would address the fuel distribution challenges in the zone.
“NNPC and DPR should be blamed for the fuel scarcity experience in the country. As I speak with you, only one out of nine storage tanks in Ejigbo Depot is working. This is not sufficient for petroleum distribution. It contributed to the scarcity of petrol and the long queues of trucks awaiting loading at the depot,” he said.
“Marketers hardly load 50 trucks from the depot due to the dilapidated state of the storage tanks. We appeal to the Federal Government through the NNPC to revive the damaged tanks so as to increase the fuel storage capacity to 200 trucks daily. As I speak with you, we are loading between 15 trucks and 17 trucks daily. This is in not enough for marketers to distribute to their customers.
“Government should ensure effective repairs of all the dilapidated storage facilities within the western zone to beef-up storage and loading capacity to at least 1million trucks on daily basis. This will address frequent fuel challenges in the country,” he stated.
According to the Executive Secretary, Major Oil Marketers Association of Nigeria, Obafemi Olawore, what led to the crisis was supply shortage. “There was supply and demand imbalance. We had more demand than the supply. NNPC did not bring in enough products. There was drop in NNPC’s supply from October 2017 and by December, the whole thing blew up. It is a supply problem. There was no enough supply, why? NNPC is the only supplier. Marketers cannot import, because government owes us. What that translates to is, that we took loans from the banks, and therefore, we are also owing the banks, and because we are owing them, they are not giving any more credit to us to import. Nigerians banks, who have their counterparts abroad, are equally suffering because the money they gave us, we have not been able to pay them. The bottom line is government should please pay us. We have been talking, we have been making a lot of appeal and nobody seems to be hearing us.”
He added, “the lasting solution lies in National Assembly passing the Petroleum Industry Bill (PIB). What they have passed is the governance bill. They should pass the PIB itself and that will lead to deregulation of the sector. Once the sector is deregulated nobody is going to depend on government. Right now everybody is depending on government. We are depending on NNPC to bring in product.”
He contiued, “it is the same thing, when supply is not enough people will misbehave. When there was no crisis, were some stations not selling below N145? Some stations were selling at N142 per litre because there was more supply than demand. It is a simple economic law. Supply is the main problem. There is no product. I am surprised that the queue is coming back to Abuja. We have been moving products there. You will however agree with me that the distance between here and Abuja not that it is too far but the road is creating a problem.”
To combat the scarcity challenge in the country, Dr. Mohammed Ibrahim, special assistant to former head of state, Gen. Abdulsalami Abubakar, on Petroleum, called on the Federal Government to
resructure the oil and gas sector.
His words: “Where we are today is that we are running a modern oil and gas sector using outdated model. Therefore, the situation is that the world has moved ahead.
“We have created a state monopoly when most parts of the world have jettisoned the idea. There is nowhere monopoly of any sort is vogue. But here, unfortunately, we keep on trying to rear a state monopoly where it is clear that it would not work.
If you look at the telecommunication sector, not until we opened up the space and allowed private operators into the system that we were able to record any growth. The system then was heading for a collapse.
Ibrahim said, “as long as we allow state monopoly or any monopoly of some sort, we will end up in this kind of situation.
Some people have argued that the creation of a state monopoly in the downstream sector of the Nigeria oil and gas industry was a necessary evil that was needed to allow Nigeria buy petroleum products at affordable prices.”
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