Fuel scarcity to persist till September 2016.

By Louis Iba

Nigeria’s lingering fuel supply crisis is to persist till about the third quarter of 2016, experts in the country’s petroleum downstream industry said on Tuesday. At a meeting held in Lagos for the first time between top management staff of downstream oil firms engaged in the importation and distribution of fuel and other business owners to find ways to wriggle the country out of the present fuel crisis, both operators and some regulators of the industry who spoke at the event gave a very grim future outlook. Unless the Federal Government summoned up the courage to deregulate the downstream petroleum industry, an end to fuel shortages and the attendant high cost across the various states of the country, was no where near in sight, marketers and importers said. The event was bankrolled by the Lagos Chambers of Commerce and Industry and Techno Oil Company Limited. Managing Director/CEO of Mobil Oil Nigeria Plc, Mr. Tunji Oyebanji, whose firm imports and also distributes petroleum products in Nigeria said Nigerians should not expect the current fuel crisis to ease until the last quarter of the year. “It is going to be a tough year for Nigeria’s downstream industry.Fuel supply challenges will not go away,” said Oyebanji in a presentation that dwelt on the business outlook for the petroleum industry in 2016. He explained the issue had gone beyond the skewed import allocation by the PPRA to the NNPC and the scarcity of forex for importers as there was even an apathy by foreign traders and creditors to deal with Nigerian fuel importers. “There are no cargoes out there willing to come to Nigeria. In fact, I don’t see anything that will change; I don’t see any immediate solution to the fuel scarcity. The fundamental message is that we need to deregulate; we need to free up the industry and allow competition by importers and marketers,” he added. Reginald Stanley, former Managing Director of the Petroleum Pricing Regulatory Agency (PPPRA) decried the “lack of clarity on the deregulation of the industry” by the government saying that had created a confusing scenario and that marketers were under threat and also losing their investments. Stanley, now Managing Director of Petrowest Energy Limited, also faulted the centralised products supply system driven by the NNPC saying for the ongoing crisis to end, the process had to be decentralised. Ken Abazie, Chairman of the Petroleum Downstream Group of the LCCI said the situation had gotten so worse that oil firms were no longer willing to put down money and invest in the sector as government’s policy on the downstream sector was so unclear. “No investor will come into Nigeria and put down money, not when we have one policy today and tomorrow we have another policy,” said Abazie. “It is time we deregulate. The Nigerian government has no business in petroleum imports and distribution order than to encourage private sector to do the business,” he added. And only under a deregulated environment could that be done, he said. A top official of one of the oil firms who declined to be named told Daily Sun “that there was no other way to wet the country with fuel except the industry is deregulated.” He also said even the forex released by the government through the CBN was immersed in a lot of bureaucratic processes that marred timely access by marketers. “The fuel scarcity that we now see will not go very soon. Many marketers have backed out as far as imports is concerned. There are very many LCs that have not been closed by marketers. And as I speak to you now, the number of vessels coming into the country is so reduced that there is no way we can imagine that supply will match demand anytime soon,” he said. Nigeria consumes an estimated 40million litres o petrol daily. In recent weeks, the country had witnessed the scarcity of the product which has also led to prices soaring to as much as N200 to N300 per litre in some states of the country.

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