Energy writers demand immediate end to fuel scarcity

 Sopuruchi Onwuka

Journalists and analysts in the Nigerian energy sector have called on government agencies responsible for regulation and market supply to immediately arrest the worsening fuel scarcity in the country to justify huge public expenditure on internal subsidy.

The energy industry reporters and analysts specifically called for immediate supply liberalization in the domestic market, joint management of the government sponsored fuel subsidy scheme, visible and transparent supply monitoring dashboard, as well as effective regulation and monitoring of play in the internal fuel market.  

Standing on the platform of National Association of Energy Correspondents (NAEC), the media group which hosts writers from all conceivable online, print and electronic media organizations in the country condemned the prevailing chaos in the fuel market, challenging the regulators in the industry to come alive.

In a statement issued by NAEC on Monday, the industry journalists expressed strong concerns about the lingering fuel scarcity and lamented that the development has brought untold hardship to Nigerians, stalled flow of goods and service and inflicted loss of productive man-hours as motorists crowd at filling stations.

NAEC pointed out that while scarcity leads to chaotic fuel queues across the country, marketers have taken advantage of the situation to profiteer from sharp market practices which currently manifest in product hoarding, return of black market operations, diversions and breaking of regulated price ceilings.

The group observed that sharp market practices in the market cuts across all marketing groups, including the Nigerian National Petroleum Company Limited (NNPCL) where pump prices have surged from official N165 per liter to over N300 per liter in some locations of the country despite the uniform pricing regime.

The development, according to the association, portends grave implications for the already weakened purchasing power and income of the average Nigerian.

“Already the high cost of petrol is impacting the daily cost of living as seen in transportation costs, energy costs as many homes continue to rely on alternative sources of power due to the poor supply from the grid as well as in high cost of goods and services. The traffic situation across the metropolis is also worsening as a result of prolonged fuel queues, causing high loss of man hours that could have been deployed to productive activities,” the group stated.

The NAEC noted that the nation’s “distribution value-chain is broken and worsened by a weak regulatory system.”

The Oracle Today reports that the NNPCL has since the inception of the current administration of President Muhammadu Buhari hijacked both the national petroleum subsidy funds and petrol supply responsibility, leading to enthronement of public sector monopoly in the system.

Besides, the national oil company is also the sole manager of the country’s petroleum subsidy funds, with the Group Chief Executive Officer, Mallam Mele Kyari, telling the national legislators that the company deducts subsidy at source of national petroleum revenue.

Thus the role of NNPCL in the market has created linear supply channel that has rendered the domestic fuel market vulnerable to supply chain disruption.

NAEC stated that the nation’s distribution value-chain is currently broken.

“It is bad enough that there is no one to hold to account, it is worse that the government has jeopardized the interest of the masses for politics, considering that elections are near,” the association declared.

NAEC discarded excuses advanced by market players including logistics, price regulation and domestic energy subsidy as lame, noting that energy subsidy remains a normal and effective economic growth stimulation strategy still employed by all developed countries of the world to tame the cost of production and guarantee the wellbeing of citizens.

It pointed out that “the subsidy system in Nigeria has been enmeshed in gross opacity.”

In pushing its recommendations for healing the market, NAEC called on NNPCL to immediately enthrone a transparent subsidy system that will allow the supply figures and cost templates that provide basis for subsidy claims to be verifiable.

In pointing out that whereas the price of petrol is still regulated under a state sponsored subsidy scheme even in the prevailing acute shortages and high prices that plague the economy, NAEC demands that all stakeholder groups should liaise with regulators to establish unassailable templates for subsidy management until the market is deregulated.

“We therefore call on government to immediately liberalize petrol supplies in the country in line with best practices.”

“Also NAEC recommends that the Nigerian Midstream and Downstream Regulatory Authority (NMDRA), which is responsible for operations compliance and resource accountability, need to rise to its duty by holding market players accountable for open books, fair play and equal opportunity.

The group also called on the NMDRA not to fail in providing a public dashboard on the supply flow in the domestic fuel market to allow the public demand for accountable practice from players; “as this will clear the air of suspicion that the prevailing fuel market crisis is not a political undertaking by managers of the system to siphon funds for political objectives.”

The media group also challenged players and groups in the domestic fuel market to embark on self regulation by dealing with errant members that encourage sharp practices at their retail outlets.