FROM SOPURUCHI ONWUKA
Indications are strong that the petrol scarcity which started weekend will worsen in the week as marketers see no immediate supply replacement from the Nigerian National Petroleum Corporation (NNPC).
Market survey by The Oracle Today Saturday showed that fuel stock at most storage facilities and retail outlet were fast running out, forcing marketing companies to scale down retail activities at major sites while they monitor supply outlook.
Procurement officials of some of the marketing companies that responded to our enquiries disclosed that stock is very low at the depots holding fuel stock for the NNPC, a development that have made it difficult for the corporation to meet fully paid supply orders from the marketing companies.
Officials of marketing companies that spoke to our correspondent stated that NNPC currently allocate only 10 percent of fully booked orders while voices at some of the depots holding the corporation’s fuel said stock levels were at 15 percent storage capacity.
At storage facilities operated by private depot owners that do not hold stock for NNPC, fuel volumes have completely dried out as most the facilities are now shut down after years and months of loading inactivity.
The Oracle Today reports that the NNPC has remained the sole importer and supplier of petrol to the domestic fuel market since the current administrations of President Muhammadu Buhari-led federal government took over in 2015.
Both the Department of Petroleum Resources (DPR) and the Petroleum Products Pricing and Regulatory Agency (PPPRA) have since ceased to issue importation licenses to private marketers, a situation which leaves the market in the hands of single supplier.
NNPC thus feeds the market with mainly imported petroleum products following inactivity at the nation’s moribund refineries which currently operate at less than 20 percent installed capacity mainly to keep equipment from wears and other issues associated with regular start ups.
The corporation drives two importation processes: direct import orders from refineries and trading companies; and its crude for product swap arrangement with foreign refineries.
Under both arrangements, NNPC traps the annual trillion dollar government subsidy on retail prices of petrol goes in bulk, leaving other marketers in the country as mere sales agents with fixed commission.
The situation which has been decried by all marketers groups in the country as a crippling state monopoly also leaves the market vulnerable to supply shocks, especially at times prior to high political campaign activities when the corporation is usually under intense cash demand pressure.
The current scarcity is coming after highly contested general elections in which the ruling All Progressive Congress (APC) deployed all state resources including the military and other state agencies in securing victory in an election which over 3000 people were arrested for election violence and the security forces have faced allegations of brazen interference in the polling process.
Analysts think that the inability of the NNPC to meet import orders within the period might not be totally unconnected with the previous allegations that the corporation was involved in massive cash movement ahead of the elections.
The two chambers of the National Assembly had last year activated investigations into observed oil cash movements following coincidences of controversial cash withdrawals from Economic Stabilization Account (also called Excess Crude Account) by the Presidency and huge subsidy claims by NNPC.
Whereas withdrawal of $1.0 billion or N360 billion from the nation’s Economic Stabilization Account (ESA) also called Excess Crude Account (ECA) sparked national outrage, the House of Representatives accused NNPC of withdrawing over N1.4 trillion from the nation’s revenue flow channels in an alleged self help effort to subsidize retail of petrol.
The withdrawals came to question following the facts that President Muhammadu Buhari’s government has been driving phased deregulation of the domestic market under a price modulation strategy that allows marketers to over-recover revenue from the retail market during low price cycle period.
The profit surge, under the arrangement, is supposed to be deployed to subsidize under-recovery during high price cycle.
The Oracle Today reports that the oil market has been in the low price since 2014 and only started heading up since 2017. Arguments are that players in the domestic retail market are still in comfort zone and may not require subsidy at the moment.
Friends of the government still argue that huge oil cash withdrawals from NNPC and national escrow accounts are customary in months leading to major elections in Nigeria.
The suspicion that NNPC might be too broke to invade the spot market with import orders and arrest the worsening scarcity dashes hopes of early resolution of the current supply crisis.
Despite claims by the NNPC’s corporate spokesman, Mr. Ndu Ughamadu, that the corporation has 55 turgid petrol depots across the country, demand orders from marketing companies only get about 10 percent supply ratio at the NNPC depots, showing the apparent weakness of the corporation to meet paid up demand.