Tuesday, May 26, 2009

Fuel Scarcity

For the fourth week going, a biting fuel scarcity has plunged Nigerians into avoidable hardship. Government officials have tried to offer explanations, but for many Nigerians a satisfactory rationalisation can only mean the availability of the products.
In the main, government has insisted on removing the subsidy on petroleum products and embarking on complete deregulation of the downstream oil sector. The petroleum marketers, who had been the main importers of the product, have however argued that with the removal of the subsidy, the landing cost of the products cannot remain at N65 per litre, but government still seems to have a say in the pricing regime. And so there was a stalemate; the major reason for the prolonged scarcity of the product as only the NNPC has become the main importer of the products.
In the first place, if government was proactive enough, it should have known that the plan to completely deregulate the sector would cause disruptions in the supply chain. And so there should have made some contingency arrangements to contain the arising eventualities. It does seem that the decision to remove the subsidy was announced before plans were made to handle the effect.
Two, it is fairly ironic that Nigerians are now being asked to pay more for petroleum products at a time when the price of the products in the international market is at an all time low. The government and even the marketers once push the argument that low crude oil prices would lead to lower prices of the products. Many Nigerians believe that if all the leakages and sleaze that take place in the oil sector are effectively blocked, Nigerians would pay less for the products.
The other worrisome issue is why nothing has been done about the so-called cartel. President Umaru Musa Yar’Adua has said that government is aware of a cartel sabotaging the supply process. The natural expectation is for government to have brought them to book, and at least expose the racketeers among them. How can government know those sabotaging the economy and yet spare them the wrath of the law?
We believe fundamentally that the fuel scarcity is completely avoidable. For, if all the nation’s refineries are to function at installed capacity, our import needs will be far less than what it is today. Even then, the private refineries licenses issued by the previous government are aimed at making Nigeria not only to stop the importation of finished products, but also to export same. But about five years after those licenses were issued, the beneficiaries have not built even one.
Given the sensitivity of oil to the Nigerian economy, we expect sufficient sensitization on the developments in the sector. There should be faultless explanation to the people who continue to bear the brunt of the problems associated with the fuel crisis.
Although the government has reached some agreement with the marketers, we call on government to rise to the occasion by dealing with the menace of saboteurs in the sector, we believe the government must begin to take more holistic steps that will address the problem once and for all, and save the nation the frequent embarrassment of fuel scarcity. One way it can do this is to encourage the holders of the licenses to build their refineries and get Nigeria to even export finished products.
All said, Nigerians want an immediate end to fuel-induced suffering especially as it affects almost every facet of our social life including even having to generate our own electricity, which also depends on petroleum products. The government should thus devise quick measures of tackling the problem and save Nigerians the daily agony. After all, government is in place to solve the problems of the people