Fuel scarcity Till May Or Infinity

Dr. Ibe Kachikwu, Minister of State for Petroleum Resources/Group Managing Director (GMD) of the Nigerian National Petroleum Cooperation (NNPC),dropped a grim hint recently when he said the lingering fuel scarcity would persist till the end of the month of May this year. According to him, NNPC’s rate of importing refined petroleum products into the country had gone beyond the 50 per cent mark to 100 per cent.

This is another way of saying the nation imports 100 per cent of her refined petroleum products’ needs, since all the country’s four refineries are virtually non- functional. Kachikwu said: “ … NNPC has moved from a 50 per cent importer of products to basically a 100 per cent importer. And the 445,000 barrels that were allocated (to local refineries) was to cover between 50 and 55 percent importation. So, it is quite frankly sheer magic that we even have the amount of products at the stations. The President and I discussed extensively on how to get more crude directed at importation. His Excellency will rather have less crude, but have individuals in the society suffer less with inconveniences, than have more crude and have them continue to suffer”. The long and short of Kachikwu’s take on the matter is that NNPC allocates 445,000 barrels of crude oil daily to Nigeria’s four refineries – two in Port Harcourt, one in Warri and the remaining one in Kaduna. But late last year, the allocation was halted because of the comatose state of the refineries, leading to the 445,000 barrels of crude meant for them being diverted to refineries abroad under an Offshore Processing Agreement (OPA); and crude oil for (refined petroleum products’) swap arrangements contracted by the NNPC. With the nation’s four refineries in a sorry state, government believes the OPA and swap alternatives are more prudent ways of putting the 445,000bpd meant for local refineries into gainful use.

Kachikwu says the 445,000 barrels now take care of 50 to 55 percent of petroleum products imported into the country; and that when the country becomes strong enough in local refining capacity, locally refined products would be left unsold in the reservoir to boost supply and availability in times of scarcity, as is now the case in the country. From Kachikwu’s logic, it is clear that Nigeria would not be under the spell of persistent fuel scarcity at present had local refining capacity (both public and private) been beefed up before now. All through the period the nation returned to democratic rule in 1999 to last year, when President Muhammadu Buhari came to power, the pervasive, yet wrong impression government advisers, including NNPC experts and their collaborators, dished out was that refining the nation’s crude locally made no economic sense. Is it not quite intriguing that the falsehood has now been exposed by no less a man than Kachikwu, who has been in the NNPC system? If refining Nigeria’s crude locally was as unviable as the government made Nigerians to believe before now, how come it is being calculated presently that if the country becomes strong in local refining capacity, locally refined petroleum products would be left unsold in the reservoir to boost supply and availability in times of scarcity? What informed Federal Government’s initiative with Joint Venture (JV) partners to end the importation of refined petroleum products between the next twelve and 18 months? What brought about the report that the Department of Petroleum Resources (DPR) granted 25 private refinery licences to interested investors in the oil refining sector – 21 in the Licence to Establish (LTE) category; and another four in the Approval to Construct (ATC) – category? For too long, Nigerians of all backgrounds have been lamenting the handling of both the nation’s upstream and downstream oil sectors. But the government played it down because it allowed NNPC to operate as a parallel government and the cash cow of a reckless political class. 

Now that the government has realised its folly, it is common Nigerians that are already bearing the brunt, since the lingering fuel scarcity, disgraceful electricity supply, high cost of dollars, plummeting value of the naira, slump in the price of crude oil and a largely disappointing private sector, have cumulatively shut up the inflationary rate and cost of living astronomically.

Credit: Nationalmirrow

Therefore, as the government grapples with stabilizing fuel and electricity supply, it should also seek ways of ameliorating the pains of ordinary Nigerians and their ominous signs of mass discontent with the grinding economic pains in the country.