Debts, market monopoly hurt Nigerians as fuel ‘subsidy’ backfires
Guardian NigeriaApr 30, 2024 4:53 AM

By Kingsley Jeremiah (Abuja), GbengaSalau, Benjamin Alade and Waliat Musa (Lagos), Rotimi Agboluaje (Ibadan), Azeez Olorunlomeru (Abeokuta), Abel Abogonye (Lafia) and Danjuma Michael(Katsina)

About one year after the much-hyped fuel subsidy removal was implemented, Nigerians seem to be back to the gruesome era of fuel supply shortfall as a shortage in importation, amidst mounting debts owed marketers, has disrupted local supply.

Long queue returns as fuel scarcity persists
• Fuel scarcity worsens economic hardship
• Black marketers hawk PMS at N2000 per litre
• Motorists abandon cars at fuel stations, fares soar
• ‘Petrol loading begins, queues to ease soon’
• Oyo NUJ condemns fuel scarcity, laments hardship

About one year after the much-hyped fuel subsidy removal was implemented, Nigerians seem to be back to the gruesome era of fuel supply shortfall as a shortage in importation, amidst mounting debts owed marketers, has disrupted local supply.

This comes as most motorists in Abuja, Lagos, Port-Harcourt and other cities across the country are beginning to leave their vehicles in queues overnight after spending multiple hours or an entire day at fuel stations due to scarcity.

The cost of transportation has also maintained an upward trend, rising by above 100 per cent in most urban centres.

As of last night, some filling stations were dispensing the products at N1500 per litre while black marketers were selling at between N1500 and N2500.

There seems to be hope, however, as the Independent Petroleum Marketers Association of Nigeria (IPMAN), yesterday, told The Guardian that the crisis would douse in the coming days as the loading of products has commenced.

While the federal government continued to deny the return of subsidies which President Bola Tinubu claimed was removed, The Guardian had reported that the country is currently paying about N907.5 billion as petrol subsidy monthly even as the National Petroleum Company Limited (NNPCL) has maintained sole importation of the white products.

Earlier this month, several oil traders reportedly told Reuters that while the NNPCL was gradually clearing the backlog of debts, over $3 billion was yet to be paid.

The traders noted that instead of the agreed 90 days, the payment was taking as much as 130 days.

Some insider sources told The Guardian, yesterday, that contrary to the logistics claim being offered by NNPC, the state oil firm, which was tweeting to motorists to stick to its fuel stations, was facing shortages of fuel due to backfiring subsidy issues.

While Tinubu has been using the limited liability company to manage the difference between the pump price and market price, financial constraints may have stroked the sustainability crisis and brought back the age-long struggle the country faced with fuel scarcity.

In Abuja yesterday, most stations were shut and the few who were dispensing fuel only did for a few hours before running out of stock even as some motorists spent about six hours in queue.

In the evening of yesterday, major outlets like NNPC Retail, A.A Rano, A.Y Shafa and most stations belonging to the major marketers were dispensing but motorists had to waste their productive hours before they could get the product.

The situation was the same in Lagos where some motorists relied on black marketers, who were outrageously demanding N1500 for a litre of fuel.

NNPC is the sole importer of fuel as none of the 90 marketers licensed by the Nigerian Midstream Downstream Regulatory Authority (NMDPRA) last year has been able to bring in products.

Already the impact of fuel scarcity is rippling through the transportation sector, with fares skyrocketing.
In Abuja, a trip from the city centre to the airport, which was N10,000, has jumped by close to 100 per cent to about N19,000 even as commuters in Lagos and elsewhere are paying direly.

The National President of IPMAN, Abubakar Mai Gandi Shettima, told The Guardian that members of the association are now loading products even as he assured that the crisis would ease.

But there are indications that some petrol stations are hoarding fuel or prioritising black marketers.

At the time of filing the report, some fuel stations in Lagos were selling at between ₦650 and ₦700 while black marketers in Ibadan, Ekiti, Lagos and other south-west cities sold the product at between N1500 and N2500.

Motorists have raised fares on the Ikotun to Egbeda by 50 per cent while the Egbeda to Oshodi route was raised by 30 per cent and some other places within Lagos. They attributed this increase to fuel scarcity and the higher prices they must pay when purchasing from black market vendors.

A motorist in Oshodi, Ismaila Ajayi expressed his frustration with the fuel scarcity, mentioning that he had been in a queue on Saturday but had to buy from the black market to avoid disruptions to his business, hoping that the situation would improve by Sunday. However, the issue worsened, and now on Monday, he faces the same challenges.

“We don’t even know what the problem is, ever since the removal of the subsidy, we’ve been facing this scarcity challenge almost every two months, which is not good for our business. The time spent at the fuel stations could have been used to make more money, but instead, we waste our time waiting in queues,” he expressed.

A commuter who simply identified as Shade expressed her concerns, noting that the cost of transportation had doubled in just two days. She emphasized that it would become increasingly difficult to get to work or run errands without breaking the bank if the situation is not addressed early.

“We need the government to step in and find a lasting solution to this problem, the current situation is unsustainable, and it’s we the ordinary Nigerians that are suffering the most,” she said.

A motorcyclist, Adewale Oyebanjo, expressed his frustration, mentioning that he bought fuel at the rate of N850. He stated that the crisis is worsening daily, to the extent that he had to set out as early as 5 am this morning to queue at the fuel station.

As of the time of filing this report, NNPCL retail outlets in Egbeda, Agege, Somolu axis were closed despite the assurance of availability of the product by the company.

Chief Executive Officer, Diary Hills Limited, Kelvin Emmanuel, said he does not buy the excuse that European refineries that are undergoing maintenance are the reason for the product’s unavailability in Nigeria. He noted that the reality is the government is struggling to cover the difference between the landing price and the pump price due to the rise in crude oil prices and the fall in the exchange rate.

He stressed that the inefficiency of NNPCL to supply Dangote with the feedstock he needs under the domestic crude oil supply obligations is affecting the ability to balance the markets through domestic supply, leading to the situation we have today.

“I think it’s important for NNPCL to be turned into a fully commercial entity by first forensic audit, then transfer to an asset manager, then business transformation, before capital raising to finance upstream operations and move NNPCL from its over-reliance on JOAs and PSCs to operator ship,” he said.

It was an excruciating experience for many commuters in Lagos, yesterday, as they struggled to get to their destinations following fuel scarcity, which hit the megacity and triggered a hike in fares.

Commuters who depend on public transportation for work and businesses spent several hours at the bus stops and parks waiting for vehicles, which were either unavailable or insufficient.

For example, at the Ojota bus stop where people usually board tricycles and minibuses to Ikeja, there were long queues of passengers but few tricycles or minibuses available.

Ironically, across all filling stations whether the ones dispensing fuel or not, young people with kegs of petrol offering to sell to motorists had taken over. They were selling at almost double the price being offered at filling stations as they were selling for between N900 and N1500 per litre.

A motorist, Segun Benjamin, who lives in FESTAC, revealed that he bought five litres at N5500 on Sunday evening from a roadside seller when all the filling stations were not dispensing fuel at the time.

“All the filling stations I visited, from NNPC in Second Rainbow to Fagbems in Jakande Bus Stop, to MRS around Apple Junction to Mobile at First Gate, AP at 21 Road, were not dispensing fuel. I also visited other filling stations within the corridor that I cannot remember their names. So, I was forced to buy from the road seller. I even regretted wasting time and fuel moving around to see if these filling stations were dispensing fuel because I wasted the little fuel in the car chasing shadows.”

In Abeokuta, Ogun state capital, the crisis has crippled mobility leaving commuters stranded across the city.

In Ibadan, the Oyo State Council of the Nigeria Union of Journalists (NUJ) condemned the lingering petrol scarcity stressing that it is causing untold hardships for citizens.

In a statement signed by the NUJ State Secretary, Sola Oladapo, and made available to journalists in Ibadan, the Chairman, Ademola Babalola, lamented that the scarcity and price increase from N750 to N800 per litre have exacerbated the economic crisis and unfavourable inflation rates in the state.

Babalola expressed concern over the suffering of ordinary citizens, who are bearing the brunt of the scarcity and called on the relevant authorities to take urgent action to address the situation.

The NUJ chairman also urged the government to find a lasting solution to the recurring petrol scarcity and price hike, which he described as a major setback to the economic development of the state and the country at large.

The union’s condemnation comes as many residents of Ibadan and other parts of Oyo State continue to struggle to access petrol, with many filling stations either closed or selling the product at exorbitant prices.”

In Lafia, Nasarawa State, where most state capitals are shut down while those selling were dispensing between ₦780 to N820 per litre, transportation fares within the city suddenly rose by a hundred per cent as the roads became empty.

A resident, who identified himself as Dauda Alkali lamented the unbearable hardship the scarcity posed to Nigerians.
“We are going through a very hard time. Life is no longer interesting in this country at the moment. We call on President Tinubu to take fast action before the country collapses,” he said.

Another motorist, Isa Mohammadu, appealed to the federal government to show mercy on Nigerian citizens over the cruel hardship the present economic policy is unleashing on people.


“The country is growing from worse to worse in areas of insecurity, hunger, and joblessness. Should we continue like this, it would not augur well for the government; many have lost faith and confidence in the leadership of this country.

In Katsina State and its environs, the scarcity paralysed economic activities as most filling stations in the state were either closed or were selling the commodity at exorbitant prices.
The usual vehicular presence on the streets was visibly missing, as motorists and communities alike lamented over the high cost as well as the scarcity of the commodity.

Some commercial motorcycle riders who spoke on the issue said they now have to buy the commodity from the black market at very costly prices or resort to queuing at filling stations that have them to buy after waiting for hours.

In the face of the current fuel scarcity, the Lagos State Government has appealed to fuel stations to ensure that queues of vehicles waiting to obtain supplies do not obstruct the free flow of traffic.

The Ministry of Transportation, in a statement, on Monday, said it viewed with great concern, the disruption of traffic flow by patrons at fuel stations as the resulting gridlock adversely affects the economic activities of individuals and corporate bodies.

The ministry, while advising operators of fuel stations to be orderly by ensuring that their patrons do not constitute any clog to the free flow of traffic further warns against being sanctioned for non-compliance.

Assuring that the state’s law enforcement agencies are on surveillance to enforce compliance, the ministry said it will continue to monitor the traffic situation while calling on the public to report fuel stations disrupting movement through its hotlines.

https://guardian.ng/news/debts-market-monopoly-hurt-nigerians-as-fuel-subsidy-backfires/amp

Hmm...

Progress cannot be made if the government continues to be opaque in handling this matter. Removing subsidies without addressing fundamental issues would only lead to bigger problems.

The cabal and systemic flaws that made subsidy unsustainable are still very much with us. Until they are addressed, the problem remains.

Till today, the following questions surrounding pms subsidy are unanswered under this administration.

1. Where & who exactly are we buying pms from? And at what price?

2. Are Nigerians getting value for money from those who sell pms to Nigeria?

3. Pms is just one out if about 7-8 derivatives of crude oil, what happens to the other products when we swap or refine? Can't they cover the cost?

4. How many litres of pms do we actually consume in nigeria? The 64m litres per day has been shown to be lies even by those in the same government.

5. What has government done to reduce associated costs such as landing costs, demurrage charges, transaction fees, bridging charges and other numerous taxes dealers have to pay that add to the final costs.

6. What has government done about the cesspool of corruption at the depots where pms trucks pay exorbitant fees just to gain entry to load and which they add to the final costs.

7. How has government addressed the numerous security agencies along the road that extort fuel trucks , an act which adds to retail costs.

8. What has government done about ensuring good roads and alternate transport systems to reduce the wear and tear on fuel transporters. Expenses which add to retail costs.

9. What security measures were put in place to tackle smuggling of fuel across borders?

10. How has the government supported local refineries?

11. What is the government doing to ensure stable FX supply since it impacts on fuel prices. Because marketers would keep increasing prices as long as fx fluctuates. So are masses going to continually pay higher prices indefinitely?

12. What has government done to ensure transparency in the fx allocation to fuel importers and what has been done to tackle corruption and ineptitude in the system. Just about 2 years ago, bad fuel was imported and till today, no one has been called to account for such major mess up that costs some persons thier livelihoods.

13. Why can't the government go after the economic saboteurs that have made subsidy unsustainable?

So, when people like that chap just keep parroting, 'remove subsidy, remove subsidy', just know they are actually just parroting a line that they have been told to toe.

It is OK for subsidy to go, but the system needs to first be sanitised so we can truly have value for what we pay for.

ivandragon:
Hmm...

Progress cannot be made if the government continues to be opaque in handling this matter. Removing subsidies without addressing fundamental issues would only lead to bigger problems.

The cabal and systemic flaws that made subsidy unsustainable are still very much with us. Until they are addressed, the problem remains.

Till today, the following questions surrounding pms subsidy are unanswered under this administration.

1. Where & who exactly are we buying pms from? And at what price?

2. Are Nigerians getting value for money from those who sell pms to Nigeria?

3. Pms is just one out if about 7-8 derivatives of crude oil, what happens to the other products when we swap or refine? Can't they cover the cost?

4. How many litres of pms do we actually consume in nigeria? The 64m litres per day has been shown to be lies even by those in the same government.

5. What has government done to reduce associated costs such as landing costs, demurrage charges, transaction fees, bridging charges and other numerous taxes dealers have to pay that add to the final costs.

6. What has government done about the cesspool of corruption at the depots where pms trucks pay exorbitant fees just to gain entry to load and which they add to the final costs.

7. How has government addressed the numerous security agencies along the road that extort fuel trucks , an act which adds to retail costs.

8. What has government done about ensuring good roads and alternate transport systems to reduce the wear and tear on fuel transporters. Expenses which add to retail costs.

9. What security measures were put in place to tackle smuggling of fuel across borders?

10. How has the government supported local refineries?

11. What is the government doing to ensure stable FX supply since it impacts on fuel prices. Because marketers would keep increasing prices as long as fx fluctuates. So are masses going to continually pay higher prices indefinitely?

12. What has government done to ensure transparency in the fx allocation to fuel importers and what has been done to tackle corruption and ineptitude in the system. Just about 2 years ago, bad fuel was imported and till today, no one has been called to account for such major mess up that costs some persons thier livelihoods.

13. Why can't the government go after the economic saboteurs that have made subsidy unsustainable?

So, when people like that chap just keep parroting, 'remove subsidy, remove subsidy', just know they are actually just parroting a line that they have been told to toe.

It is OK for subsidy to go, but the system needs to first be sanitised so we can truly have value for what we pay for.

Hmmmmm

Vital questions 

When you ask these vital questions to those who are in government today, their supporters will term you an enemy of progress.

Ask them, Where's the progress that this government has made since coming on board? They begin to run around like headless chickens.

Tinubu is a big failure and nothing good will ever come out of him