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• Minister of State, Petroleum, Ibe Kachikwu

Kachikwu Explains Lingering Fuel Scarcity

Stories by Yemi Akinsuyi:

Minister of State for Petroleum, Ibe Kachikwu has blamed the recent queues at filling station across the country on the activities of hoarders and the inability of independent marketers to import the product into the country this December.

Kachikwu, who stated this while briefin on the scarcity of fuel, however promised that his Ministry in collaboration with the Nigeria National Petroleum Corporation (NNPC), will ensure adequate supply of the product immediately.

“Let me say that what is encouraging as of today is that this morning (last Friday), the queues in Lagos have substantially disappeared, there are few queues here and there but nothing substantial. The ones in Abuja, we are tackling. I’ve looked at the map provided by the NNPC on this and the large areas of focus are Lagos, Abuja, and some parts of Benue which I think has been dealt with now. Port Harcourt shows a bit of cyclical possibility of queues, but I think that is moderated and other than that, I think the rest of the country are largely liquid.

“What caused some of these, first of all, there were some level of gaps in terms of volume. That gap was because the NNPC is the only one importing most of the products at the currently. Most of the people we expected in the private sector to import product were not able to bring in products, some of them have pushed back the days they were supposed to bring in products to January and so you have NNPC rapidly trying to fill up products requirements in terms of 100 per cent capacity basis.

“Clearly, rise in crude price has resulted in rise in refined products prices, and that is probably why the private sector is unable to deliver their cargoes and looking a time when prices are a bit cheaper.

“I’ve always said that the position I occupy has a twin blessings of some sort. If I can get crude prices to be high, Nigeria benefits in terms of budgeting, but once I do that then I’m faced with the responsibilities that the products are going to come in higher. So, clearly a relationship but I think one has to praise the NNPC. Despite that, they have done a very good yeoman job of trying to meet 100 per cent supply requirement when the private sector has jumped off. What we do need to do going forward is to see how we can incentives the private sector to see how they can go back.”

He added: “Hoarding is also a problem anytime we have this time lag. Dealers and agents try to make fairly quick gains. There are quite a bit of hoarding going on and some of the actions we’ve taken so far is the direction to the NNPC to release everything they have in storage which we’ve done about two days ago. The second is to look for emergency supply wherever they can find to plug the gap pending the arrival of their own vessels and the third is an instruction to track the delivery vessels.

“There is a directive for stricter monitoring of the distribution by the regulatory agencies. The DPR is handling that and the security agencies is also helping out. I have also asked the DPR to enforce stricter actions and penalties against anyone that is flouting the directive.

Speaking on the measure put in place by his Ministry in ameliorating the suffering of the masses, the  Minister said there will be massive dispensing of the fuel in store, as well as making maximum use of the few refineries currently refining the product in the country.

He said: “Luckily, there was enough storage which they are releasing right now. They are also making emergency steps to try and fill whatever gaps in December. Post-January, there isn’t much of an issue because most of the deliveries expected should be coming in.

“In This  December, we are looking at about four cargoes coming in within the next few days, but cumulatively, 20 to 30 cargoes. It is a timing issue because some of the products expected from the private sector didn’t come in, but they are making efforts to quicken the ones they are expecting, and in the interim, they are resorting to what is in storage.

“Luckily also, the refinery in Kaduna is being streamed and that is beginning to produce right now to help the situation.

“There is also emergency trucking from all the NNPC depots. Additionally, Port Harcourt is streaming and it is expected that about 12 to 14 December they will get into production and 2.1 million litres production per day.

“Over the next couple of days, we should see a sliding down of many of the queues, it is beginning to happen in Lagos and we should see that over the weekend in Abuja.

“Short-term, expand emergency deliveries, improve on logistics in terms of trucking, improve on enforcement with the regulatory agencies and obviously penalise anybody who is hoarding or operating to create artificial scarcity. Those measures should fairly quickly take this away. Over the last two Christmas, we’ve been very lucky not having queues and these had been as a result of very huge planning. We are almost sure that we will have the same situation. No panic about it.

“Long term, the position remains what we’ve said, our refineries must begin to work. The process of the refineries upgrade is almost complete and very soon we will announce those who eventually won that process and they can go back to work beginning from January.

“That is very key because unless we address those long term issue, we will keep having these cyclical situations in supplies. We are also relying on Dangote to come on stream in another two years to add to local efforts we are working on. The NNPC is on top this, the security agencies are helping them.”

The Chief Operating Officer of Kaduna Refinery, Anighor Krager promised that Kaduna will deliver quantum volume of 16 million litres to stabilise the market.

“We expect to deliver about 750,000 litres per day for the next few weeks. Port Harcourt is running right now, the FCC will kick in about a week and at that time, it will deliver about 2.1 million litres”, he said.

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