Nigeria’s President Sets Up Committee to Tackle Lingering Fuel Scarcity

In search of a solution for the lingering fuel scarcity in Nigeria, President Muhammadu Buhari has approved the constitution of a 14-man Steering Committee on Petroleum Products Supply and Distribution management.

The Steering Committee, which will be saddled with the responsibility of finding a lasting solution to disruptions in the supply and distribution of petroleum products, will be chaired by Buhari, with the Minister of State for Petroleum Resource, Chief Timipre Sylva as Alternate Chairman.

Members of the committee include the Minister of Finance, Permanent Secretary, Ministry of Petroleum Resources, National Economic Adviser to the President and Director-General, Department of State Services (DSS).

Others are Comptroller-General, Nigerian Customs Service (NCS), Chairman, Economic and Financial Crimes Commission Member (EFCC), and Commandant-General, Nigerian Security and Civil Defence Corps (NSCDC)

There are also others: they include Authority Chief Executive NMDPRA, Governor, Central Bank of Nigeria, Group Chief Executive Officer, NNPC Limited, Special Advisor (Special Duties) to the HMSPR while the Technical Advisor (Midstream) to the HMSPR will serve as Secretary.

The move became necessary following weeks of fuel scarcity that has unleashed much suffering on people across the country, with the cost of transport rising as filling stations hike pump prices. The situation has been attributed to disrupted supply and distribution of fuel across Nigeria.

Sylva said in a statement by his Senior Adviser (Media and Communications), Horatius Egua that the committee would tackle the challenge of supply and distribution.

The minister has directed the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to ensure strict compliance with the government approved ex-depot and retail prices for PMS, a move seen as key in making petroleum products available across the country.

As part of the committee’s efforts to ensure that there is adequate supply of fuel, Sylva also directed the NMDPRA to ensure that NNPC Limited, which is the supplier of last resort, meets the domestic supply obligation of PMS and other petroleum products in the country.

In addition, the minister directed the committee to ensure that the interests of the ordinary Nigerian is protected from price exploitation on other deregulated products such as Automative Gas Oil (AGO), Dual Purpose Kerosene (DPK) and Liquified Petroleum Gas (LPG).

“The Federal Government will not allow misguided elements to bring untold hardship upon the citizenry and attempt to discredit government’s efforts in consolidating the gains made thus far in the oil and gas sector of the economy,” he said.

Other terms of reference are said to ensure national strategic stock management, visibility on the NNPC Limited refineries rehabilitation programme and ensure end-end tracking of petroleum products, especial PMS to ascertain daily national consumption and eliminate smuggling.

Buhari is understood to have chosen to set up the committee after other efforts to curtail the fuel scarcity fail. Fuel is currently being sold from N185 to N300 in many parts of the country. Many Nigerians have accepted the price but still don’t see fuel to buy as many filling stations are closed.

The fuel scarcity is also crippling businesses that depend on generators for electricity supply as power supply has been more epileptic due to shortage of gas supply to power stations.

Update: Reasons for Fuel Scarcity in Nigeria

Major oil marketers under the aegis of the Major Oil Marketers Association of Nigeria (MOMAN) has noted the core reasons for fuel scarcity in Nigeria:

• MOMAN said, “These queues are caused by exceptionally high demand and bottlenecks in the distribution chain. The major cause is the shortage and high (US dollar) costs of daughter’s vessels for ferrying products from mother vessels to depots along the coast.
• “Next is an inadequate number of trucks to meet the demand to deliver product from depots to filling stations nationwide. These high logistics and exchange rate costs continue to put pressure on prices at the pumps.
• “Over the past three months, staff and management of MOMAN companies have worked diligently at depots and filling stations to relieve the stress faced by customers through the Christmas and New year period.”
• “Our members have again agreed to extend depot loading hours as well as keep strategically situated service stations open for long
• “A final resolution to these challenges will be the full deregulation of the petroleum downstream sector to encourage the liberalization of supply and long-term investment distribution assets. We urge the government to work towards this end goal.’’