By LOUIS IBA
As Nigeria’s fuel supply situation continue to degenerate with every passing day, the Centre for Public policy Alternatives (CPPA) has warned of an imminent protest by citizens if managers of the industry failed to step up efforts to reform the distribution mechanism of petroleum products and ensure consumers get full benefit of being citizens of a major crude oil producing nation.
The latest crisis has been attributed to shortfalls in supply owing to the refusal of some firms hitherto involved in the importation of fuel to continue in the business over the non-settlements of debts (under the fuel subsidy scheme estimated at N200billion) by the federal government. In Lagos, petrol in some fuel stations now sells above N105 per litre, while in other parts of the country it it selling above N200 per litre owing to the scarcity.
The exit of the local importers from the business has since left the NNPC, as the sole importer of the petroleum products, and the state-owned firm has been struggling to fill the gap alone. Presently, about 30 million litres of petrol is consumed daily in Nigeria. So far about $19billion is believed to have been sunk into the subsidy scheme in the last five years, the bulk going however to fraudulent marketers, who hardly import nor supply the goods to consumers, yet queue up and get paid by government alongside genuine importers and marketers.
Folarin Gbadebo-Smith, who heads the CCPA in Nigeria, said going by the latest revelations by the various probe commissions in the industry, it was apparent that the sector was immersed in massive fraud that needed to be unearthed, adding that the system should be restructured for efficient and improved services to citizens. “The current system of energy subsidies is shown to be imperfect in a number of ways and one of them is that the benefits flow disproportionately to wealthier citizens,” Folarin said.
“Transparency is a key mechanism to improve credibility and reduce opportunities for corruption,” he added. According to a data from regulator, the Petroleum Products Pricing Regulatory Agency (PPPRA), the subsidy bill for petrol jumped from N151.9billion to N673billion between 2006 and 2010, and spiked N2.19 trillion in 2011.
And probe or audit reports have shown that the spike was as a result of graft where the book was cooked up to reflect a faulty daily increase of consumption pattern from 30 million litres to 33 million litres. But the Lawan Farouk House of Representative probe committee had established that subsidies were paid for volumes of petrol not supplied to the Nigerian market. Folarin said badly managed subsidies impose lots of costs on the economy, including smuggling of subsidized fuels out of the country.
“A long term solution to the energy pricing problem hinges on introducing more efficient redistributive mechanism,” said Folarin. “Otherwise the fuel subsidy protests will return,” he warned.
TheSun
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