Blame is the new essence as NNPC, overwhelmed oil traders

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As NNPC Limited blames smugglers for continued fuel shortage, oil workers’ unions accuse NNPC of insufficient supply and independent traders accuse oil workers’ union of indiscriminate accusations forcing them to raise prices .

In the ongoing mess over the distribution of petroleum products in Africa’s largest oil-producing country, Nigerians are being blamed instead of gasoline.

Whether it’s an aloof and aloof oil minister, or oil marketers demanding a royal ransom for a liter of petrol, blame is the new game and its consequence is spreading in mile-long queues and generates low-level chaos.

Nigeria’s continuing fuel shortage is taking its toll on individuals and businesses and those tasked with finding a solution are exchanging blame. Critical sectors like trade and agriculture are slowing, small businesses are being gutted and tempers are unraveling weeks ahead of a general election that could scuttle the situation.

Mele Kyari, CEO of NNPCL, speaking at a high-level security meeting on Tuesday, accused smugglers of transporting goods across borders. In a room full of security officials, oil marketers and other downstream operators, Kyari said the culprits were in the same room.

He accused depot operators of selling to petrol station owners above the approved ex-depot price, insisting there was petrol at depots across the country.

Last week, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) claimed that there were more than 1.6 billion liters of gasoline both on land and at sea in a statement, blaming smugglers for the scarcity of products.

The current distribution problem is compounded by the activities of cross-border smugglers, who divert gasoline destined for the Nigerian market to neighboring countries where gasoline prices are significantly above Nigeria’s regulated price. We are engaging and working with the Nigerian Customs Service to resolve this issue, the statement said.

Oil marketers say the issue is more nuanced and easily find others to blame. Mike Osatuyi, Comptroller of National Operations, Independent Petroleum Marketers Association of Nigeria (IPMAN), in a recorded interview on Arise Television on Wednesday, blamed the Nigerian Union of Petroleum and Natural Gas Workers (NUPENG), for blind charges resulting in additional costs for price per liter of gasoline.

The problem we have at IPMAN is the high freight charges charged by NUPENG. You are billed before your truck is allowed to come and load. Where do we put this money in the model? NUPENG is involved in the gasoline shortage, he said.

Traders also blamed the NNPC. It’s NNPC’s fault because they didn’t bring the product. NNPC has now agreed to open about three or four additional depots for IPMAN charging products on their platform, Osatuyi said.

Meanwhile, NUPENG in a recent statement has a target for its own blame game.

The most disturbing and greatest obstacle to the usual efficient and patriotic services is the depressing and frustrating antics of some unscrupulous traders who are busy using this seemingly initial break in ship-to-shore logistics to exploit and extort the unhappy public through the racketeering and hoarding of proceeds, said a statement signed by Williams Akporeha and Afolabi Olawale, President and Secretary General of NUPENG.

Nigeria continues to suffer the consequences of thinking that normal market rules do not apply to gasoline.

Regarding the smuggling of the product, Osatuyi said smuggling continues because the price gap is tempting. If you buy fuel in Nigeria for 5 million naira and sell it abroad for 15 million naira, that is a profit. All it takes is the fear of God for someone not to get involved.

If they want to stop smuggling today, NUPENG should come out and tell its members not to drive trucks across the border, Osatuyi said.

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But industry watchers say government policy that relies on the fear of God to ensure compliance is unsustainable. Therefore, ill-conceived government policies would continue to create opportunities for arbitrage, no matter how surprised officials claim to be when exploited.

By selling imported gasoline cheaper in Nigeria than in other markets on the continent, with smooth borders, the government has made smuggling attractive. This illicit trade will continue with its attendant problems if Nigeria fixes its refineries but still sells gasoline cheaper than its peers, a stakeholder told BusinessDay on Wednesday.

Lucky Irabor, General of the Army and Chief of Staff of Nigeria, speaking at the security meeting with the NNPC, warned traders that chaos in the sector would no longer be tolerated, threatening that the government is not handicapped and takes action.

But the growing wave of smuggling which the NNPC says is making its daily supply of 60 million liters insufficient, shows that these threats no longer scare anyone, as oil traders, like most Nigerians, exploit the loophole, according to some industry observers.

President Muhamadu Buhari, who is also the oil minister, set up a 14-person steering committee on the management of petroleum products supply and distribution last week to find a lasting solution to the supply disruptions. and the distribution of petroleum products.

The committee met with industry players on Tuesday and some marketers are optimistic that a temporary solution can be found. The country is past temporary solutions, but that would be enough for a government whose leader is supposed to mark time until May 29, when he will retire to Daura.

While pundits and analysts of all shades believe that deregulation and the total removal of subsidies is the solution to the current mess, widespread anger over a cost of N300/per liter of petrol at some service stations is challenging question the preparation of Nigerians for the removal of subsidies.

Petrol sells in other African countries including Ghana, Benin, Togo, Cameroon and other smaller economy countries for between 400 and 500 naira per litre, but some still think Nigeria can carry on its useless subsidy scheme to keep gas prices low.

This is even when rising oil prices in the global market show that local refining would not lead to significantly cheaper gasoline prices, a situation that creates another possibility for the government to blame Nigerians. .

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