Nigeria: Fuel Scarcity – a New Hydra Rises and Nigerians Are Feeling the Heat

While fuel scarcity in the past has often revolved around increased pump price or subsidy removal, the latest scarcity biting Nigerians hard sees a new entrant: adulterated fuel or off-the-specification petroleum products. Vanessa Obioha and Iyke Bede report that like the previous fuel crisis, this current fiasco is still a game of finger-pointing without any clear thought out process to ameliorate the situation.

For the past two weeks, Nigerians have been subjected to the tiring and distressing experience of sourcing for premium motor spirit (PMS), also known as fuel. Except if you own a private fuel dispensing outlet permanently installed in your abode, you may have been saved from the long queues and the burning sun. To be sure, it is not an adventure anyone wants to embark upon.

The petrol scarcity imbroglio that has lasted for about a fortnight now is not a new experience in Nigeria.

From time to time, Nigerians move out en-masse, jerry cans in hand, or behind the steering wheels to source fuel at all cost. In some recorded cases in the past few years, many have been compelled to roll out their generating set to stations that refused to sell to them in their cans, citing a preference to exclusively service motorists.

A Tale as Old as Time

Despite being an oil-producing country, once in a while, Nigerians face fuel shortages. In most cases, a prospective change in pricing caused by the removal of fuel subsidies is usually the culprit. The first recorded fuel scarcity reportedly happened during the Civil War when Gowon increased the pump price.

Under the military rule that stretched between the 80s and 90s, Nigerians also bore the brunt of fuel scarcity, particularly during the late General Sani Abacha’s regime. He was said to have increased the pump price but later reduced it.

However, the 2012 fuel scarcity during the tenure of the former president, Goodluck Ebele Jonathan is notable for the protests that accompanied it. Jonathan had announced the removal of subsidy with the implication of increasing the pump prices.

Although the move was to reroute the funds to other aspects of the economy that need revitalisation, the idea was not welcomed, with many citizens saying it was the only incentive they are aware of receiving from the government.

To harden the blow, the rollout was not the best of timing. The removal of the fuel subsidy was implemented on the first day of January 2012. This series of actions led many to tag the action as the government’s ‘New Year Gift.’ It was a heavily criticised move that bore many consequences.
To that effect, the #OcuppyNigeria campaign was launched as a form of protest against the government.

Aggrieved protesters shut fuel stations down, further obstructing the free flow of petroleum products to the masses. Also, major labour unions embarked on indefinite strike action to reaffirm their commitment to protecting the masses interests.

This cascade of events translated to a thriving black market ecosystem where fuel was being sold at exorbitant prices that showed a marked price increase. It was between a 300 to 500 per cent increase in the pump price of N145 (adjusted from the original pump price of N67).

Similarly, in 2014, as part of its plans to reduce the subsidy paid, the initiative of lowering the number of licences to importers and independent marketers was introduced, yet it worsened the situation as inadequate amounts of fuel went into circulation.

Reportedly, the said importers and marketers had quoted that a low supply of fuel was a delay in the license approval process by the Nigerian National Petroleum Corporation (NNPC). On their part, the NNPC countered the claims by insisting that marketers had ulterior motives of hoarding fuel to cause a hike from unavailability and increase profit for them.

This back and forth between marketers, importers, and labour unions, in one way or another, has led to fuel scarcity at different times, with the most notable years being 2003, 2005, 2008, 2012, and 2013.

A New Hydra Rises: Adulterated Fuel

While fuel scarcity in the past has often revolved around increased pump price or subsidy removal, the latest scarcity biting Nigerians hard sees a new entrant: adulterated fuel or off-the-specification petroleum products. This time around, the new parameter has created a massive ripple that halts many processes.

After carrying out a thorough investigation, the NNPC announced that the current scarcity of the PMS is reportedly tied to a recall of supplied products that had high quantities of a gasoline additive, methanol.

This additive ensures optimal performance of the motor engine and is attributable to the presence of oxygen and high octane that helps fuel burn more efficiently.

While this appears to be a favourable characteristic of methanol in the refinement of PMS, an excess of it results in undesirable effects for motorists.

For over four decades, the Nigerian government has, without providing straightforward reasons, imported petroleum products despite being one of the biggest producers of crude oil globally. Daily, it produces about 2.4 million barrels but imports over 70% of its gasoline.

The economics behind these processes may be foggy to the layman but the illogicality of the export-import mechanism that provides zero jobs for its citizenry while rendering it unable to extract, keep, and use every bit of crude oil distillate is not lost.

For a long time now, the existing four refineries installed by the federal government either work below their intended capacity or don’t work at all. However, millions of dollars go into maintaining them yearly.

This has caused many to question the said ‘maintenance’, with many concluding that it is a front for corrupt government officials to line their pockets with money. And as for those who aren’t involved in the practice, they stay mute to maintain a grasp on power.

In a recent release shared by NNPC, it announced that it has augmented fuel supply, claiming it has one billion litres of petrol in stock, a quantity it expects can close the gap created by the shortages in the supply chain.

“As of today, NNPC has over one billion litres of certified PMS (petrol) stock that is safe for use in vehicles and machineries. As part of NNPC’s strategic restocking, over 2.3 billion litres of PMS (petrol) is scheduled for delivery between now and end of February 2022 which will restore sufficiency level above the national target of 30 days,” the company said.

As reassuring as those words may sound towards instilling the confidence back in Nigerian, there is a lot left to be desired from their effort that comes days after the adulterated fuel hit the market.
Who is Responsible?

The first cases of scarcity can be traced back to MRS Nigeria. To clear their name, they categorically stated that the petroleum products were not imported by them directly, and claimed to have sourced the products from NNPC.

“Due to the current subsidy regime, NNPC is the sole importer of all PMS in Nigeria. Consequently, NNPC, through their trading arm Duke Oil, supplied a cargo of PMS purchased from international trader Litasco and delivered it with the Motor Tanker (MT), Nord Gainer,” MRS said in the statement.

The said product was reportedly traced to a cargo delivered by Litasco, the Swiss trading arm of Russia’s Lukoil.

At first, there were no clear answers as to how the fuel got into the country, as NNPC struggled its way to explain, stalling, and creating a panic in the market that eventually led to a higher demand for the product.

According to the CEO of NNPC, Mele Kyari, reports reached the corporation as early as January 20, alerting them of unusual emulsion particles in the shipment from Antwerp, Belgium. Based on the quality certificate issued at load port in Belgium following an inspection carried out by AmSpec, it was revealed that the gasoline complied with Nigerian standards.

Likewise, further tests carried out by the GMO, SGS, GeoChem and G&G before discharge into the Nigerian markets also verified that it met with Nigerian standards.

But if all these tests were carried out, how come there was seepage of excess methanol into the cargo? And despite observing an unusual emulsion in the product, it still gave it a green light without more complex tests.

In NNPC’s defence, Kyari said: “It is important to note that the usual quality inspection protocol employed in both the load port in Belgium and our discharge ports in Nigeria do not include the test for per cent methanol content and therefore the additive was not detected by our quality inspectors.”

He noted that methanol discovery was made by its inspection agents who noticed the emulsification at the filling stations and after several investigations, NNPC moved swiftly to trace all the affected products and quarantine them to forestall further damage.

Name-calling?

This lack of communication or miscommunication as the case may be between Nigerians and the apex petroleum company doesn’t inspire confidence.

Despite the initial warning that made its way to NNPC on January 20, 2022, they paid a blind end, with hopes that their vindication lies with the routine tests carried out. From all indications the NNPC is responsible for the distribution, exploring, refining, and producing petroleum products.

It would take days until it remits any useful information to the public, listing one of its subsidiaries, Duke Oil, as playing a role in disbursing methanol-laden fuel nationwide.

In total, the NNPC named four companies (including MRS), with the remaining two being Emadeb Energy Services Limited, and Oando.

A recent press release by Emadeb Energy Services Limited dated February 10, 2022, absolved itself of any responsibility or repercussions that may arise from the circulation of the adulterated fuel.
“We hereby state that the said importation of the contaminated PMS was executed by a member of the consortium, to wit: Brittania-U,” the company stated.

“Therefore, the blanket claims made against the consortium by the NNPC are misleading and contradict the actual events that happened; they do not fully reflect and/or represent what transpired. It is important to inform the public of these facts and provide clarifications relating to the delivery of the said contaminated PMS to the country. We also deem it necessary to protect our image as we have invested a lot in building our respective brands in the industry.”

Damaging Effects.

With just four companies mentioned, one would assume that the effect would not be profound, at least on paper.

On the weekend that marked the start of the fuel scarcity, a video report of an MRS attendant disbursing fuel in a plastic water bottle revealed something unusual. Normally, the colour of fuel ranges from colourless to light amber. However, the fuel being disbursed was a muddy brown, indicating that something is amiss.

For a start, a few people reported having their vehicles sustain some level of damages. The Chairman of the Major Oil Marketers Association of Nigeria (MOMAN), Olumide Adeosun, revealed that 136 reported cases of damaged vehicle engines were discovered as a result of the contaminated fuel.

“We were aware of this and have been working to ensure that the product received was separated, so it does not contaminate others, leading to destruction of consumers’ engines. Yet, some bad cases were recorded, including the Ardova PLC case, which led to 136 reported cases of vehicle engines damaged,” he stated.

The impact on the economy has also been overwhelming as every part of the economy, directly and indirectly, depends on fuel.

As early as Monday, February 13, 2022, long queues have crystallised across fuel stations in Nigeria’s leading cities: Lagos, Abuja, and Port Harcourt. The frustration experienced by Nigerians was palpable from the look on their faces: tired and stretched to their limit before official working hours, and these were just a handful of those who could afford to own and maintain a vehicle.

To the commercial drivers, the rat race to secure fuel became a bona fide reason to hike fares by over 300 per cent, ultimately placing the average nine to five workers in a situation where they had to pay through their teeth for the recklessness of those they had very little influence on.

Those who could not afford the hiked price in their meager earnings, trekked to their offices just to retain their jobs.

Within this short period, coupled with existing inflation, the prices of goods have slightly risen. But above all, the main profiteers of this fuel scarcity brouhaha are the black market merchants.

“To ensure my business runs smoothly, I had to source the black market merchants to secure fuel speedily,” Obong Emmanuel, a hairstylist along Apapa Road, Ebute-Metta, Lagos, told THISDAY.

“Of course, I must cover the cost for the extra expenses that I have made. I normally charge a base fee of N500 for haircuts, but because I am buying fuel at an exorbitant price, I have increased the base fee to N700.

“It would have been a different case if there was constant power supply. As you can see, it is not my fault, I set up my business for profit-making,” concluded the stylist whose makeshift barbing salon was constructed from a container.

A young man who pleaded anonymity lamented on the irregular power supply that coincided with the fuel scarcity. He showed a text circulated by the Eko Electricity Distribution Company (EKEDC), explaining the recent drop in the amount of power supply. It reads:

“Dear Customer, the reduction in power supply you have been experiencing for the past three weeks is due to the drop in power generation from an average of 3,700MW to 2,000MW per hour caused by gas limitations arising from vandalism, and more recently an issue affecting TCN line from the Egbin Power Plant.

“We apologize for the inconvenience this may have caused and assure you that we are working with our generation and transmission partners to ensure stable supply is achieved within the shortest possible time.

“We equally commenced major network rehabilitation and relief projects within our network two weeks ago that will significantly improve our services to our dear customers.”

He revealed that the supply in the area had decreased to a point where the expected accumulated power supply daily was below five hours. He however says the drop isn’t reflected in the exorbitant bills they received each month.

“I have no choice as I work from home permanently. I can’t give my boss the excuse of low power supply, I have to deliver on my deadlines. So, getting fuel is imperative at this point.”
With so many people making it down to the various fueling stations, it becomes a situation of survival of the fittest.

Mr. Ezekiel John, a motorcyclist who operates in the Ojo area of Lagos State, bemoaned the long queues in filling stations. “I spent half of my day at the filling station just to get fuel at the rate of N300 per litre. And I have to still beg before I was attended to.”

Segun, a motorist who plies the Orile/Mile 2 axis openly admitted to securing fuel easily. It has become a culture with motorists and fuel attendants, where the latter is encouraged with bribes so that they can jump lines. For others who refuse to ‘roger’ these attendants, they risk spending hours in line, losing precious time.

A common practice by most petrol stations during fuel scarcity is to abruptly halt sales when the queue is too much. For instance, a black market merchant complained that Total which was the only petrol station selling at the rate of N250 close to Iyana-Isashi bus stop along the Lagos/Badagry Expressway planned to stop selling for no reason.

“I usually take my gallons at night so that I could buy for the other day, but the attendant told me not to bother because the manager asked them to lock up,” said the woman.

However, some of the black merchants have resorted to selling to individuals who can pay higher than the stipulated price. Nollywood actor Gideon Okeke made this known in a post on Instagram. The post partly read: “It is bad enough that black market sells one litre for N5, 000. Worst off, the fact that the black market dealer vehemently brags about only selling to Yahoo boys. Because dem no dey prize market. Anything you tell dem, dem go pay!”

A dead-end?

In a way, from the apex petroleum body to the ordinary attendant, we observe how scarcity of a commodity with which Nigeria is richly blessed, exposes a matrix of corrupt practices.

From NNPC listing names of companies involved with the disbursement of adulterated products, to said companies countering claims made by NNPC, to the motorist and barber who feel justified for their actions, the current fuel scarcity, just like the previous ones, is a game of finger-pointing without any thought out process to better approach the situation in the future.

As expected, Nigerians will move on with their life as soon as the supply chains are restored.

“While fuel scarcity in the past has often revolved around increased pump price or subsidy removal, the latest scarcity biting Nigerians hard sees a new entrant: adulterated fuel or off-the-specification petroleum products. This time around, the new parameter has created a massive ripple that halts many processes”

“As early as Monday, February 13, 2022, long queues have crystalised across fuel stations in Nigeria’s leading cities: Lagos, Abuja, and Port Harcourt. The frustration experienced by Nigerians was palpable from the look on their faces: tired and stretched to their limit before official working hours”

ThisDay