THUR, MARCH 1 2018-theG&BJournal-The Government and Business Journal, Nigeria’s fastest growing online business and financial news provider, (the G&BJournal) reports authoritatively that the persisting petrol scarcity is as a result of conscious rationing of the product across the country by the Nigeria National Petroleum Corporation (NNPC), the country’s near monopoly in the supply market.
Our investigation also reveals that the reason behind the step is essentially due to the thin resources of the Federal government and the absence of an appropriation for the year to fund ‘subsidy’ claims to independent marketers.
The Finance Minister, Kemi Adeosun, in December 2017 confirmed the payment of over N407 billion in subsidy claims to oil marketers after months in denial by the federal government that it had ended subsidy claims payment. Her statement in admitting the payments which came at the beginning of the petrol crisis, was an attempt to shift the blame on to the independent markets when it became obvious the government could no longer sustain the burden of subsidy claims, according our source.
As our reporters noted Tuesday, the lines of cars and trucks snaking in disarray across some major cities in the country, particularly, Abuja, the nation’s capital, highlight the inability of the NNPC and indeed, the Federal Government to end the crisis viewed mostly as the biggest failure of the President Muhammadu Buhari’s administration and that of his political party, The All Progressive Congress (APC).
“The key to solving the crisis is changing the product pricing,” says our source, a major player in the oil and gas sector. “But that for now is politically suicidal because the country is heading into an election year-2019,” he added.
On December 18, 2017, theG&BJournal predicted that the scarcity will persist well into 2018 because of the existing automatic subsidy implication to this whole mess. Our assumption was based on the obvious changes in exchange rates, rising price of crude oil which in all indicates that input factors were changing. We had expected a federal government response to the changing dynamics.
In January this year, the Federal Government attempted to respond to these market forces when it acknowledged in a press statement that the current price of N145 per litre was no longer sustainable, considering the landing cost of fuel in the country.
The minister of State for Petroleum Resources, Ibe Kachikwu, at a Senate hearing on January 5 also confirmed that the landing cost of the product is about N170/N171 P/L. His statement opened speculation among industry stakeholders then that the federal government was about to do the right thing.
“That is not going to happen now, not as we head towards the election,” our source said cynically. “If they tamper with the product official price now then that is the end of Buhari’s APC.”
