The Politics Behind 'December' Fuel Scarcity
Last December, as usual, fuel scarcity hit hard on the people few days before the yuletide. The scarcity continued into the new year.
It has been a problem that has over the last two decades or more exposed Nigeria to ridicule, scorn and shame.
Several efforts from different governments, right from the late dictator - Sani Abacha to the present day self acclaimed Government of Truth it has been the same story.
The current fuel scarcity has, however, lasted a bit longer than most would have expected.
Every regime follows the typical playbook in dealing with the scarcity:
Step 1 - sympathize with Nigerians and talk about how they shouldn't be wasting useful hours queueing for fuel;
Step 2 - talk about how marketers, smugglers, and various middlemen are sabotaging the economy for their own selfish interests;
Step 3 - promise to revamp the refineries; pay off marketers so they can settle their debts, import new products and flood the market with fuel, with the hopes that it makes the scarcity go away.
However, some of the reasons given by the current administration for the scarcity during the last festive periods are scary.
The government accused political opponents, who are not happy with the "success" recorded by this administration of masterminding the crisis.
It was alleged that former Vice President Atiku Abubakar, who recently dumped the ruling All Progressives Congress (APC) for the Peoples Democratic Party (PDP) paid several millions of naira to oil marketers to hoard the product.
Another political dimension was added to the crisis when the Publicity Secretary of the APC, Bolaji Abdullahi was quoted as saying that there is fuel scarcity because President Muhammadu Buhari’s economy made Nigerians to buy too many cars in 2017 - Are your as shocked as I am?
Abdullahi, later denied making such a statement.
Why are we still queuing? Shebi Christmas is over...
Simple answer: because the price of petrol went up in the international market.
In May 2016, when the federal government and NNPC reviewed the petrol pricing template, the cost of a metric tonne of petrol was $440.
Today, the same volume is around $620, so we do not expect the retail price to remain the same. If it does, then someone is paying for the $180 difference on every metric tonne.
Since the government claims it is not paying subsidy to independent marketers; them who is the good samaritan bearing the cost?
If the marketers will not make profit, except they sell above N145 per litre, then it makes no sense for them to import.
This leaves importing to the Nigerian National Petroleum Corporation (NNPC) alone, and Nigeria’s oil sector history has shown that NNPC cannot walk alone.
This is where the dilemma lies for the Buhari administration.
Like Jonathan, Like Buhari
For a government that came into being criticising the past adminsitration for the huge funds spent on subsidy with the attendant fraud, it is difficult for the same government to go back to the subsidy regime.
Buhari himself in the run-up to the 2015 elections maintained that subsidy is a scam.
Similarly, in 2018, just a year to the 2019 general elections, where the president would be seeking re-election, increasing the price of fuel to match the importation cost is almost akin to a political suicide.
Not that the continuous scarcity and long queues and high cost of the product at filling stations helps his course either.
All the identified problems show that Nigeria does not have fuel crisis but governance crisis.
In all this, we often forget to ask ourselves a simple question: Is fuel scarcity the problem or is it just a symptom of the problem?
If fuel is really scarce, where did the black marketers get their stock from?
Did they also import the fuel they sell at exorbitant prices?
Isn’t it possible that filling stations, which claimed to have run out of stock and whose gates were shut to motorists during the day, were in the racket with them?
Could the station owners have preferred to sell to the hooligans say N200 per litre (as against the official N145), and then leave the black marketers to sell at whatever price they wish?
Moving forward; how do we deal with this Nigerian cultural phenomenon?
The first unavoidable step is that the country needs to have its refineries working.
It’s a shame that after 40 years, Nigeria cannot produce its domestic consumption. It makes no sense that Nigeria continues to import finished petroleum products at huge cost to the people.
Secondly, the petroleum industry should be fully deregulated. Not privatized or unbundled - deregulated!!!
The government cannot and should not take on these responsibilities because this metaphorical car is bound to crash if it insists on doing so.
Deregulation ensures that the government does not bite more than it can chew.
The benefits of deregulation are: opening up opportunities for private investors who are reluctant to invest due to frequent government interference.
Companies with approved licences would go ahead and build new refineries to making the petroleum resources available, petro-chemical industries will spring up, thereby creating job opportunities.
But pending when the petroleum industry is fully deregulated, the government should not only make marketers responsible for every tank of fuel up until point of delivery, but there must also be severe consequences for product diversions.
Diversion of critical inelastic and indispensable product like petrol must be treated as an act of terror.
There should be prompt sanctions for non-compliance and rewards for those who play by the rules.
The National Assembly must make oversight function routine. Legislators must be more proactive.
Never again should government at all levels be off duty. Public holidays are for public servants not elected or appointed executives in critical sectors.
Marketers are in business to make profit, which they would do through padded fuel price template or blatant products diversions as revealed not long ago by Minister of State for Petroleum, Ibe Kachikwu.
Less I forget, the Aso Rock Cabal should leave Kachikwu alone.
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