Since 1998,
Nigeria has been spending billions of Naira on subsidy of petroleum products to
cushion the effects of the increase in pump price of the products.
Unfortunately, the refineries are not working at full throttle and even if they
are, they can only produce half of the country’s demand implying the other half
will be sourced from other countries. As if this is not bad enough, the 22 fuel
depots across the country owned and managed by the state owned Pipelines and Petroleum Marketing Company (PPMC)
is moribund and in dire need of rehabilitation. Due to these reasons,
government licensed private investors to import petroleum products into the
country, store and distribute to various filling stations across the country
through trucking.
The
independent marketers presently import 50% of the country’s daily consumption
while the state owned Nigerian National Petroleum Corporation, NNPC imports the
balance of 20 million litres. Good a thing, it has been reviewed to 78%/22% for
the NNPC/Independent marketers. Better still, if it is 100%/0! As a result of
this imbroglio, it looks to many, like the NNPC is doing nothing!
Yet, the
NNPC imports refined products and distributes accordingly while the independent
marketers import their quota and may decide to distribute or not depending on
how they feel about issues of pricing variations generally referred to as
subsidy. They hoard their quota and the vacuum created makes the NNPC’s ration
grossly inadequate to nourish the voracious appetite of consumers.
The
Petroleum Minister, through the Directorate
of Petroleum Resources (DPR) has shut several independent fuel depots and
filling stations across the country for hoarding fuel. Some defaulting filling
stations have had their product dispensed free of charge to consumers.
Apparently,
these measures are not deterrent enough as the practitioners have found ways
round it! The NNPC says that the landing cost of premium motor spirit (PMS)
otherwise referred to as Petrol across all depots is N77.00/litre for which it
must pay a subsidy of about N10.00/litre. Petrol presently sells at government
regulated price of N87.00/litre but at the height of the menace, it can sell
for as much as N400.00/litre! The independent marketers complained that they
owe banks for the last import they made and government must pay them their
accruable subsidy for things to be normalized.
Government
on its part, said the subsidy was not captured in the last budget and at such
went ahead to make a supplementary budget to capture the close to N500B subsidy
payments, approved by the country’s national assembly and dispensed to the
marketers. While this was ongoing, the consumers were suffering, the artisans
were gnashing their teeth and the economy was being asphyxiated.
Apparently
the racketeering marketers have devised devious means of checkmating the DPR
onslaught as they dispense fuel in the late hours of the night or wee hours of
the morning because they believe the DPR officials work from 8:00hrs to
17:00hrs daily. They in turn sell fuel at the depots and at the filling
stations between 19:00hrs to 22:00hrs and 05:00hrs to 08:00hrs of the night and
day respectively at rates far higher than the approved rate. Small wonder fuel
tankers move more in the night than in the day during fuel scarcity, man-made,
that is.
These
carefully selected hours of dispensing fuel by the independent marketers are
not rigid but very flexibly sensitive to DPR inquisitions and the stark truth
is that any DPR official that attempts to sanction the erring marketers will
probably meet with the wrath of irrationally desperate consumers. It is that
bad. This, therefore, is how the independent marketers are making humongous
profit out of a well concocted problem in the name of the government and in
solidarity with the people!
The options
open to the government is to continue paying subsidy to the independent
marketers while fixing the refineries and depots, appoint the NNPC the sole
importer of refined petroleum products into Nigeria which they can now sell to
independent marketers for effective distribution to consumers across the
country and at government approved price or privatize the refineries, the
depots and allow free market economy take control.
Of all these
options it is certain that the most cost effective, people friendly and chaos
sensitive is for the NNPC to be the sole importer of fuel in the short term,
while fixing of refineries and depots is ongoing and in the medium term,
privatization. The racketeers have inflicted terrible pains on the people and
the country for far too long, it is time to put them where they belong; A cage!
Yes, it is time to take care of the subsidy challenge once and for all and
effectively decimate the racket behind the market. (Source: Guardian)
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