Pipeline closure: Fuel shortage looms in Lagos, others.

 by Stanley Opara Everest Amaefule and Ifeanyi Onuba.

Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke.

LAGOS, Ibadan, Ilorin and  their environs risk potential fuel crisis with the closure of system 2B, the Nigerian National Petroleum Corporation’s supply pipeline from Lagos to Mosimi Depot in Ogun State.

The closure was  due to the pipeline explosion at a point around Arepo, off the Lagos-Ibadan Expressway.

“We are likely to have an upsurge of demand in Lagos depots due to the closure of system 2B, which is an NNPC pipeline at Shagamu. We didnt have enough products in the country before now, and this closure will worsen the situation,” a source at the Nigerian Independent Petroleum Company, Plc said.

This development coincides with a warning by oil marketers, who as part of their lingering confrontation with the Federal Government over subsidy claims, on Monday advised  Nigerians to be prepared for a nationwide fuel scarcity.

The Secretary General, Jetties and Petroleum Tank Farm Owners Association, Mr. Enoch Kanawa, in a telephone interview with one of our correspondents on Monday, said the oil marketers had no money to continue to  import .

He  said  the NNPC alone  cannot  satisfy  the demand by Nigerians.

Kanawa said, “A lot of our money is still outstanding. Marketers are being owed huge sums of money. Three weeks ago when we  were crying about all these issues, they said we are blackmailing the Federal Government and we are shielding marketers from facing prosecution.

“Currently,  none of our members is  importing because there are still payment issues outstanding. It is the NNPC that is holding the market and they don’t have the network to satisfy the demands of Nigerians.”

He said the oil marketers were being owed about N200b in for fuel subsidy.

But the Minister of Finance, Dr. Ngozi Okonjo-Iweala, faulted him, saying  the Federal Government had continued to pay marketers whose claims have been duly verified.

 The minister, who spoke through her Senior Special Assistant, Mr. Paul Nwabuikwu, said  government was committed to encouraging  honest and professional private sector operators in the subsidy regime.

Okonjo-Iweala said, “A total of N259, 339,041,657.85” has been paid as fuel subsidy claims in 2011-2012.”

 The NNPC spokesperson, Mr. Fidel Pepple, who also confirmed the closure of the System 2B product pipeline to our correspondent on the telephone on Monday, assured  that the development  would not adversely affect the availability of petroleum products.

 “The closure of this line will not affect the availability of products. It will only increase demand pressure on products in Lagos. Most trucks will have to come to Lagos to get products. This will, therefore, not affect supply as the  Petroleum Products Marketing Company has enough to go round,” he explained.

Pepple told our correspondent that the PPMC had created alternative channels to address the challenge resulting from the closure of the System 2B line.

“It is using Apapa and Satellite depots.  As far as the NNPC is concerned, the PPMC has enough products for the country,” he said.

He told The PUNCH that as at Thursday last week, the NNPC had 32 -day sufficiency of petrol.

“Between Sunday and Monday (yesterday), a vessel had finished discharging product, and another is currently discharging,” he added.

Commenting on the inability of some marketers to get enough supply of product, Pepple said it could be attributed to operational problems or some hitches encountered in the course of lifting products.

Oil marketers in the country, have however, said that they might not resume petrol importation anytime soon.

They said that given the current situation, the NNPC might continue product importation solely.

The marketers, however, maintained that with the NNPC solely importing petrol, the country remained prone to product shortage and eventual scarcity.

A source at NIPCO told our correspondent that petrol prices at the depot level were currently between N92.50 to N94 as against N89.60 to N90.60. This rise in price, it was learnt, was a function of mounting pressure on supply limits (supply deficiencies).

 “The system 2B pipeline has been closed. When things like this happen, government comes up with a directive that people who hitherto get supply from system 2B be served from Lagos. This will definitely increase  pressure on the facilities in Lagos,” the source added.

The development came just as fuel queues resurfaced in Abuja on Monday.

While some of the fuel stations run out of stock, others that sold  fuel were besieged by motorists.

Kanawa said, “The fuel queue that is resurfacing now will take a long time because we have run out of stock in our depots. We are being owed for products delivered. So where do they want us to see money to import because the banks are not borrowing?

 “The banks need an assurance that when we import, the claims would be paid to enable us pay back.”

He said that the major marketers such as MRS , Capital Oil, Oando, Conoil and Forte Oil that would have assisted the NNPC to distribute petroleum products have issues with the government.