Fuel Scarcity: What Kachikwu, NNPC Boss Told Senate
The fuel scarcity that Nigerians are battling has so many sides to it and the Senate on Thursday heard all of them, as it tries to understand if this recurring situation will ever end.
It wants to get hold of all the situations that have caused the yuletide hardship on Nigerians to understand if the solution would come by creating a law or just through a better strategy.
It has become a thing Nigerians suffer at that time of the year.
The lawmakers had invited the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr Maikanti Baru and some other persons, groups and agencies in the sector to brief them on the situation.
A committee headed by Senator, Kabiru Marafa, held the hearing at the National Assembly complex in Abuja.
After taking an oath on the Holy Bible that 'everything he will say is the truth', Dr. Kachikwu started by apologising to Nigerians on behalf of the Nigerian President, Mr Muhammadu Buhari, who is the Petroleum Minister.
“Nobody worries more about the fuel scarcity as much as he does,” he told the lawmakers whom he also appreciated for cutting short their recess for the investigative hearing.
"The reasons for the fuel queues will be presented by the GMD of the NNPC.
"The major marketers stopped importation and it caused a problem.
"Major marketers stopped importation due to differences. The business model of fuel supply in the country is not the way it should be.
"It is shameful that after 30 to 40 years, we cannot yet produce refined fuel for our people.
"We have the technical capacity to do this. A lot of work is going on to make this happen.
"We have the technical capacity to solve this problem, we need to bring in the private sector participation," he told the Senate.
When the GMD of the NNPC began his address after taking an oath, he sympathised with Nigerians who had to queue for fuel, highlighting that people could not travel at the yuletide because of the issue.
"I am reassuring Nigerians that we will clear the queues."
Baru did not give a time-frame as to when the queue would go away, but he said “the real cause of the scarcity are the rumours that there was going to be an increase in the price of fuel.
"These rumours were all over the social media and it led to distributors hoarding and diverting the product.
“The rumoured difference of 145 Naira and 300 Naira and above is huge incentive for smugglers,” he told the Senate.
The NNPC’s boss also explained that prior to the fuel scarcity the NNPC had 1.9 billion litres, as reported by the PPPRA which would have lasted for 53 days.
"However, due to massive diversion, hoarding, panic buying and smuggling, coupled with the information that the October cargoes had been rejected, there were insinuations of a supply gap.
"The three cargoes rejected were immediately re-allocated to other DSDP supplies and the consortia involved were penalised by not being allocated cargoes for three months,” he further told the Senators.
A few actions have been taken to address the situation and Mr Baru said these included activation of a war-room, additional imports to increase sufficiency, 24-hour operations at all NNPC’s depots and mega stations.
"We also amplified our media and stakeholder engagements so that the public would get the right information.
"Some issues we saw include: For IPMAN: High ex-depot price from DAPPMA and MOMAN and refusal to provide evidence of paying over 133.28 Naira per litre."
He then recommended that regulators and law enforcement agencies apply appropriate sanctions and bring in a lot more products in the first quarter of this year.
For Dr. Kachikwu, the solution will be an 18-month emergency
period to enable the government to put in mechanisms to address pricing,
landing cost of products and ex-depot.
He emphasised that the government needed to deal with the gaps that exist.
“We need to address the pricing issue by working with the Central Bank of Nigeria to ensure that we stay at 145 Naira. We also need to address tax invasion, capture the tax those in the sector pay.
Also Read: DPR Seals 80 Petrol Stations In Delta
“We need criminal charges for illegal marketers, because it is an infringement on the nation's economy. Everyone in the chain must be made to face the law.
“We have to have perfect enforcement for this to work," the Minister added.
A few other persons that briefed the Senate were the Director of the Department of Petroleum Resources, Mordecai Ladan, Executive secretary MOMAN, Mr Obafemi Thomas Olawore, Chairman Board of Trustees IPMAN, Aminu Abdu Kano and the National President NARTO Alhaji Kassim Ibrahim Bataiya.