Fuel Scarcity: Kachikwu’s Magic Wand

Ibe Kachikwu has finally
been pummeled into
accepting the toga of a
magician. Under the present
circumstances, what the
minister of state for
petroleum has promised
after the rancorous call for
his resignation can only be
achieved by a magician.
Marketers insist that fuel
scarcity would linger till
May, and that only a
magician could end it in
nine days. Those who visited
Apapa port yesterday
contend that the minister’s
deadline was unrealistic.
Only three of the depots had
fuel.
Industry watchers argue that
for Kachikwu to meet the
ambitious deadline, the
Nigerian National Petroleum
Corporation (NNPC) would
have to be delivering two
ship loads of petrol per
week. The corporation
muted that plan last week
but delivered only one
cargo.
Kachikwu tried last week to
ease the tension by wading
into the crisis plaguing the
ranks of independent
marketers. The marketers
have not imported fuel for
several months now.
They cannot raise the foreign
exchange for the transaction.
The federal government had
all along offered forex for
fuel imports at official rate.
But with the country’s
foreign reserves plunging to
$27 billion, that luxury could
no longer be extended to
independent marketers. The
marketers cannot source for
forex in the parallel market
because at the current rate
of N320 to the dollar, the
pump price of fuel imported
with it would be more than
N200 per litre.
Besides, even with the
scarcity worsening, no one
wants the marketers to be
given forex at N197 to the
dollar for fuel imports.
The dollars would simply
end up in the parallel
market. Consequently, there
are no signs that things
would improve on Thursday.
Yesterday the fuel queues
were frighteningly long.
One of the queues in
Abeokuta, Ogun state
stretched for one kilometer.
It started where a sign post
proclaims: “NNPC Mega
Station: 1 kilometer ahead”,
and ended at the station.
The crowd at the station was
larger than Balogun market
in Lagos.
The Department of
Petroleum Resources (DPR)
has finally lost its feeble
control over marketers.
Retail outlets now display
their extortionist prices on
the pumps without fear. On
Sunday, outlets on Benin-
Shagamu expressway sold
petrol at N190 per litre. The
pumps were defiantly
adjusted to that price.
Kachikwu is a technocrat.
His current post is probably
his first political
appointment. He speaks
more like a technocrat than
a politician. What he
probably did not know is
that as group managing
director of NNPC he is more
of a politician than a
technocrat. Since he doubles
as minister of state for
petroleum his expressions
should be less venomous.
Two weeks ago he did not
want to wield the political
magic wand. Without
equivocation, he told State
House correspondents that
the long, winding queues at
fuel retail outlets would
continue till May. A few
days later it became clear
that Nigerians would not
mind it if a magician
replaces Ibe Kachikwu and
delivers fuel as dividend.
The minister reluctantly
offered to wield the magic
wand. He reduced the
expected period of suffering
from two months to nine
day. There are fears now
that he may be sailing
perilously close to failure.
The queues are getting
longer.
Kachikwu blames diversion,
pipelines vandalisation,
stampeded buying and the
comatose state of the
refineries for fuel scarcity.
Everyone knows that the
primary cause of the crisis is
the yawning supply deficit
in the market. Pipeline
vandalisation is older than
democracy in Nigeria. At
the best of times it would
disrupt supply for a few days
before NNPC engineers fix
the broken lines.
Now the scarcity has refused
to go away and there are no
indications that the vandals
have taken their evil acts to
greater heights.
Diversion is as old as fuel
subsidy in Nigeria. Some
retail outlets specialize in
diversion of fuel to
neighbouring west African
countries where it sells at
twice Nigeria’s official pump
price. We have lived with
the antics of such dubious
marketers for decades, but
they never took us as
perilously close to economic
calamity as we are today.
The problem of diversion
could be tackled if NNPC is
willing to step on the
powerful toes behind the
crime.
NNPC could combat
diversion by mounting
electronic sensors on all its
fuel tankers and monitoring
their movement from Abuja.
However, the final solution
is self-sufficiency in refined
products.