NNPC Grounds Nigeria to a Halt

•Imported Dirty Fuel Still On Sale • Nigerians Keep Vigil At Filling Stations • Petrol Sells for N300 per litre • Commuters Groan Over Increased Fares • Businesses Count Losses

At a time that Nigeria’s flat economy, for the first time in many years, is expected to benefit from the rising price of crude oil in the international market, currently about $95 per barrel, the country is transfixed in agony over a resurgent fuel crisis caused by a large quantity of dirty fuel imported into the country under the supervision of the Nigeria National Petroleum Company Limited, NNPC.

Since February 10, 2022 when the news broke and the NNPC named the culprits as Oando, Emadeb/Hyde/AY Maikifi/Brittania-U Consortium, MRS, Duke Oil (its international subsidiary), though the first two marketers have exonerated themselves and blamed the NNPC for being the sole importer of petroleum, Nigerians have been going through pain and distress, following the disruptions of their economic activities in view of the centrality of the fuel supply chain to the economy.

By the time these social and economic disruptions are checked, the expected accruable revenue from increased oil price, however minimal, would have been eroded as the damage caused by the imported bad fuel would have wiped out any gains.

Throughout last week, during which the NNPC promised to ensure regular supply of petrol at various filling stations across the country, Nigerians have and will continue to keep vigil at the stations to buy fuel at rising costs, with the attendant multiplier effect on their economy.

Although adequate data, as usual, is unavailable, there are palpable facts that Nigerians are counting their losses in all areas of their lives.

Apart from the black market prices that now range between N500 and N1,000 per litre, some petrol stations were jerking their prices from the prevailing price of N162 per litre to between N175, N200 and N300 per litre, according to findings by our correspondents across the country.

Except at the NNPC mini or mega filling stations at Sapele Road, Benin-City, Edo State; Abeokuta in Ogun State; Olusegun Obasanjo Way, Zone 1 in Abuja and at Ikoyi, Lagos State, for example, where petrol still sells at the prevailing N162 per litre, many other stations have capitalised on the situation to increase the price of the commodity with different strategies.

At the Oando filling station on Ekoro Road, AbuleEgba, Lagos, petrol was sold for N300 per litre last Friday morning. At the Mobil filling station on LagosAbeokuta Expressway, Abule-Egba, it was sold at the usual N162 per litre, but black marketers fronting for some of the station attendants sold in jerry cans at N250 per litre within the premises.

The price of petrol at Dahaush and Cynai filling stations in the Igando area of Lagos, was N200 per litre, while at Enyo, which is situated in the same neighbourhood, the price was N250 throughout last week.

At Alak filling station in Rounda, Abeokuta, Ogun State, petrol sold for N200 per litre throughout last week. In most filling stations in Yenagoa, Bayelsa State, the price of petrol stands at N175 per litre. In Calabar, the Cross Rivers State capital, fuel is available, but it is mostly of the ‘dirty’ type causing problems in the country.

Taxi drivers and car owners, Mike Essien and Odey Silas, lamented that though they found fuel to buy, their vehicles had been damaged before they knew the problem was caused by bad fuel bought at filling stations within the municipality.

“My vehicle got bad and I was told by the mechanic who serviced it that it was bad petrol that caused the damage.

“It’s a vehicle I have driven in the last six years. I noticed that the sound of the engine was different that fateful morning after I fueled the car in one of the filling stations here,” Silas told THEWILL.

Essien said he had been buying petrol from some filling stations in Calabar Municipality, but he noticed that when he bought fuel at Calabar South, his car developed a problem and was not firing properly.

He said that after fixing the problem, it kept recurring until he refuelled outside Calabar South.

HARDSHIP FOR NIGERIANS

Businesses that depend on generators for power in the face of epileptic electricity supply are counting their losses. Frozen foods sellers, barbing salons, football viewing centres, provision stores, beer parlours, have all fallen on bad times.

To perpetuate their crime, some of the filling stations monitored across states in the country have resorted to selling petrol at 6 am. They stop selling between 7am and 8 am. Others start selling at 1 pm and stop within a few hours, while some only sell at night.

By the end of the week, those business owners that managed to get fuel at high costs started passing some of the costs, especially of perishable food items, to consumers.

Also, the heavy traffic caused by queuing vehicles on busy main roads in the bid to get fuel have created an avenue for accidents and pickpockets and street fights

by those struggling to get fuel. Some people wake up as early as 4: am to queue at a petrol station just to increase their chances of getting fuel.

Respondents who spoke to THEWILL in Makurdi, capital of Benue State, have decried the negative effect of the fuel crisis on their families and businesses.

A check at some fuel filling stations on the busy Otukpo Road in Makurdi shows that only the AP filling stations along George Akume Road were selling as of Friday last week with only one out of eight pumps dispensing fuel. P.Kura Oil and Gas Ltd, along Otukpo road, Makurdi and Total Filling station, opposite Federal Road Safety Commission, were closed to customers. Motorists queued up as early as 5.am but could only get rationed fuel to buy at high costs.

Commenting on the situation, a commercial motorcycle operator, Shater Alom, said that since he bought petrol at an abnormal price, he was forced to increase his fare from N100 to N200 so as to remain in business, while a commuter, Dooshima Agba, lamented that she boarded a vehicle from Makurdi to Vandeikya at the cost of N2,200 instead of N1,500.

The Vice President of the Nigeria Union of Journalists Zone D, Comrade Kris Atsaka, described the development as unfortunate and regrettable, coming at a time when there is so much hardship in the country.

“For a long time, the Federal Government ensured that petroleum products were available, though at a higher price than expected. Nevertheless, the ongoing scarcity is excruciating. The Federal Government should do something about it so as to save the people from unnecessary hardship,”Atsaka said.

He appealed to dealers and marketers of petroleum products to be more circumspect and honestly move to stop the fuel crisis immediately.

In an interview with THEWILL, the station manager of Jenny Investment Nigeria Limited, Makurdi, Mr Otajele Onuh, said the filling station had continued to sell fuel from 8am to 6pm daily since last Monday.

A federal civil servant, Mrs Toryina Kator, said the Federal Government and the NNPC should be held responsible for the ongoing fuel crisis in the county.

Surprisingly, in Akwa Ibom State, where there is no scarcity of petrol, the commercial interests are similar to what is playing out in other parts of the country, in terms of exploitation of the people. There are no queues at filling stations as independent petroleum products marketers are selling their products though at higher prices.

A survey by THEWILL correspondent in Uyo, the state capital, showed that Independent marketers determine the pump price of the product. As of last Thursday, petrol sold for N175,00, leaving motorists, especially commercial bus drivers, to complain bitterly about the increase which they claimed was a daily occurence. Meanwhile NNPC, Oando, Total, Mobil filling stations in the state remain closed.

An independent marketing station manager along Aka Road, Uyo, Eyo Brown, blamed the hike in the price of the products to the high price at which the major marketers sold the product to them.

“It is how we buy. We have to make some profit, at least. That is why some others have closed their filling stations. That is how it is and we don’t know if it will not get to N200 per litre because the suppliers always increase their rates.”

In Ogun State, commercial drivers have resorted to spending nights at filling stations to buy fuel at N200 per litre. There, commercial taxi drivers, commercial motorcycle and tricycle operators, popularly called Okada riders, have continued to experience difficulty in filling their vehicles with petrol.

As of the time of filing this report, most petrol filling stations in Abeokuta had suspended their operations. Only Nigerian National Petroleum Corporation (NNPC) and Fatgbems filling stations were selling petrol to motorists at N162 and N165, respectively.

A taxi driver, Wasiu Lemboye, complained bitterly that “Taxi drivers are now sleeping over at the filling station to buy fuel because of the scarcity. If the Federal Government wants to increase the pump price of petrol, let them tell us because this suffering is too much.”

For tolerating the suffering and because he wants to remain in business, Lamboye said he has to pass on the cost of lost man hours to the commuters.

He said, “People are even finding it difficult to afford the fare we charge them. Before the scarcity, the fare from NNPC junction to Iyana-Mortuary was N50, but now we charge N200 to make ends meet.”

A tricycle operator, Waheed Lawal, who recounted how he took his toothbrush, a sachet of pure water and a piece of cloth to pass the night at a petrol station, said that he and his colleagues now charge N150 from Lafenwa to Olomore, which stood at N100 before the crisis.

“This scarcity of fuel is really affecting our business. I slept in a filling station on Monday. I had to tell my wife about it. I took my toothbrush, a sachet of pure water, a loincloth and packed them into my tricycle. It was the next morning (Tuesday) that I bought fuel at N200 per litre at the Alak patrol station in Rounda in Abeokuta.

“In fact passengers are complaining about the money we charge them. Before the scarcity we usually charged N100 from Lafenwa to Olomore Bus Stop. Now the fare is N150. We are begging the government to please find a solution to this problem,” he noted.

An Okada rider, Femi Samuel, said that he had to travel over a long distance to a village in Igbogila to buy fuel at N200 per litre because the long queue at different filling stations in the capital was time consuming. To make up for that, he said he had to raise the Lafenwa to Oke-Ilewo fare from N200 to N300 from Lafenwa to Oke-Ilewo.

In Jos, the Plateau State capital, Mr Alex Omeje of Open Plan Design Ltd, a firm of consulting engineers, summed up the general situation by saying, “It is not the first time”, but as usual it is “very unpleasant and unpleasurable”.

He said it is unfortunate that for a struggling economy, people are spending a lot of man-hours sleeping at filling stations, in spite of all the promises for the fiscal process of 2022.

Omeje holds the government responsible for the “unnecessary hardship” underscoring the development as “disappointing and unforgivable” and wonders why Nigeria should continue to import fuel after 61 years of Independence.

“It is very sad” is simply how a Managing Partner at Solomon Iroagba and Co, a chartered accounting firm, Solomon Iroagba, summed up his experience with the subsisting fuel palaver. He recalled that this government came with a lot of promises, including a downward review of the pump price of petrol. Now, he noted, fuel is selling at N162.50 and whenever the government wants to remove the subsidy on petrol, it will create artificial scarcity. But again, he contended, “Why must we continue to import fuel?”

“Taxi drivers are now sleeping over at the filling station to buy fuel because of the scarcity. if the Federal Government wants to increase the pump price of petrol, let them tell us because this suffering is too much

THE PROBLEM AND REAL CULPRIT

After the exchange of accusations and denials between NNPC, Oando and MRS, the Group Managing Director of the NNPC, Mele Kyari, has since issued an apology to Nigerians on the ‘dirty’ fuel saga and promised to remedy the situation by last weekend.

Nonetheless, Kyari’s choice of words in his explanation on the fuel crisis during an appearance before the House of Representatives’ Committee on Petroleum Resources (Downstream) last Wednesday has shed more light on the source of the problem.

Arguing that the supply followed normal regulation and specification, which made it difficult for the company to discover the problem, Kyari stated: “On the basis of those contracts, our suppliers bring products to us and reconcile with them regularly. Part of those supply arrangements is to give specifications to your suppliers.

“These specifications are bound by regulation and the latest that we are using is the one that is in place since 2006. All our partners were given those specifications and on the basis of this, those imports were made.

“In the case of all the problems we have seen, five of the cargoes that are particularly in question today met all these criteria on arrival and that was why they were allowed to discharge into terminals and conveyed into ships.

“There was simply no way, based on the current specification, that you will know this PMS contains methanol. It is not part of their requirements at the load port. So, we did not ask them to declare whether it contained methanol because it is not part of our specification.”

The key words in his statement are specifications and regulations. Apart from the NNPC, which, judging by Kyari’s statement, has admitted the error, identified the problem, isolated and recalled the bad product, the other organisation that ought to ensure standards are not compromised in such a situation is the Standards Organisation of Nigeria (SON) according to investigation by THEWILL.

Surprisingly, that organisation that is charged with ensuring that imported and exported goods meet standards that are uniform globally, washed its hands off the fuel saga.

Head of Public Relations of SON, Mr Bola Fashina, told THEWILL that though the organisation has since reached out to the Midstream and Downstream Petroleum Regulatory Authority and offered support in areas of testing, it cannot be implicated in the current problem.

He said, “Since 2011 when SON was asked to leave the ports, we can only check products at the ports if we are invited to do so. So SON cannot be involved in this problem.

“Given the question you asked about standard and regulation, yes, we can test to meet standards. That is why we issued a statement in January 2022, saying that we want to help meet standards in the oil industry. We have been in touch with the Midstream and Downstream Petroleum Regulatory Authority to support their capacity to conduct such testing and see how we can work together.”

When asked whether the set standards were working, he said there are four ways to know whether standards are working or not.

“They are through observation of what is going on, through consumer activity, through reports from industry players informing us about new innovations and through market surveys by our offices nationwide to see if products made in Nigeria or coming from abroad meet the requirements to enable us trace products to source in order to ensure that regulation is appropriate.”

He said that since the NNPC GMD had named the marketers involved in the importation of the ‘dirty’ fuel, SON could in no way be implicated or held responsible.

WHAT WENT WRONG

Further investigation by THEWILL showed that the problem might have been complicated by the poor governance structure in the industry.

According to an NNPC official, who spoke on the condition of anonymity, what has been referred to as toxic fuel is actually a misnomer and that the ‘dirty’ fuel may have been coming from the same Belgium before now.

Explaining that the current situation is different from the mixed or adulterated fuel saga in 2006, the official said, “This particular one is that ordinarily we do not import fuel with methanol content. Even so, you can still use the fuel. What happened is that it got mixed with water. Normally, after discharge, the fuel is allowed to settle, then float before it is pumped out for sale. But when you have methanol mixed with water, it is intolerable. After all, some marketers got the same fuel and are selling it. How? They discharged into tanks that had no water. They did not mix their stock with water. So what the NNPC boss meant with specification and standard is that we do not allow importation of fuel with methanol content and the companies involved know that specification.”

THE NNPC CONNECTION

The NNPC has been seen as a cesspool of corruption in the affairs of government. From skewed appointments to non-remittance of required revenue to the Federation Account, the organisation has remained in the public eye over the poor management of the nation’s collective wealth.

“No matter how you think of it, as some political scientists theorised, disorder has been instrumentalised to the extent that elite groups deliberately create crises in order to feather their own nests, not giving a damn for the sufferings of the hapless majority

The price Nigerians pay for the poor management of the nation’s oil wealth is unimaginable. Every year, the four idle refineries consume huge amounts of money in personnel and “maintenance” costs.

The Nigerian National Petroleum Corporation (NNPC Limited) recently disclosed that its three refineries recorded a combined operational deficit of N11.77 billion in three months. In its Monthly Financial Reports released on February 13, 2022, the refineries located in Port Harcourt, Warri and Kaduna did not process crude oil during the period due to ongoing rehabilitation. A breakdown of the losses incurred showed that the three refineries lost N4.01 billion in August, N3.37 billion in July and N4.01 billion in June 2021.

An audit report published by the NNPC in June 2020, showed that three of Nigeria’s four refineries gulped N1.64 trillion in cumulative losses recorded in their operations since 2014. Two of these refineries are the 210,000 barrels per day capacity Port Harcourt Refining and Petrochemical Company Limited and 110,000 barrels per day Kaduna Refining and Petrochemical Company Limited.

The audit reports showed that combined losses from the two refineries were N208.6 billion in 2014; N252.8 billion in 2015; N290.6 billion in 2016; N412 billion in 2017, and N475 billion in 2018. Further reports revealed that cumulative losses from the operations of the four refineries in 2017 and 2018 stood at about N412.8 billion.

In September 2021, the oil company reported that workers at the four government-owned refineries were paid a total of N69.07 billion in 2020. The plants generated zero revenue as they did not process a single barrel of crude oil.

The refineries suffered a combined loss of N108.29 billion in 2020, compared to N162.22 billion in the previous year, according to data collated from their audited financial statements.

As if driving on all lanes towards systematic destruction of the oil-dependent economy, the continued importation of petrol for which a humongous amount is paid as subsidy remains an Achilles heel in Nigeria’s political leadership.

Commenting on the huge cost of imported contaminated petrol, Visiting Fellow at the London School of Economics, Olu Fasan, said, “We must recognise that Nigeria is in this pickle, in this mess, because it is utterly dependent on the importation of refined fuel. Despite being a major crude oil producer and exporter, Nigeria lacks the capacity to produce refined petroleum. Its four refineries are completely moribund. So, to meet its fuel needs and avoid long fuel queues at petrol stations, it has to import refined petroleum mainly from Europe.

“Then, there is the impact of climate change. Last year, at the United Nations climate change conference, COP26, Nigeria made a commitment to reach net zero carbon by 2060 and the government has since signed a climate change act into law. But how would Nigeria reach net zero carbon unless it stops importing dirty fuels and unless it introduces electric cars?

“With respect to the current problem of contaminated fuel, the government must investigate why the regulatory authority failed to prevent the importation of the fuel. Surely, unless the contaminated fuel was smuggled into the country, it must have entered the market through the normal trade channels. So who dropped the ball must be held accountable for the mess.”

Fasan, a London-based lawyer and political economist, told THEWILL in a note that there is a need to compensate Nigerians, who suffered through long fuel queues where many man-hours were lost, and those who have suffered other economic losses.

“Let us face it, this is negligence, indeed recklessness, on the part of the government. But, in the long run, the question is how Nigeria can stop being dependent on the importation of dirty fuels and how it can move into climate-friendly energy sources, such as renewables and electric vehicles,” he said.

According to Prof Ayo Olukotun, the fuel saga speaks volumes about all that is bad about the country.

According to the professor of political science and media expert; “It is hard to believe that contaminated fuel with high methanol content could escape the rigorous quality reassurance both at the source, in this case, Belgium, and here in Nigeria where all the marketing companies reportedly have their own vetting mechanisms.

“The statement by the Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari, naming four companies as the source of the problem read like an afterthought and lame justification in a context where the NNPC is the sole importer of petroleum, a fact pointed out to it by three of the companies named.

“The so-called explanation also begs several questions and issues, especially the one concerning how Premium Motor Spirit that is so badly contaminated circumvented all the inspection procedures that are meant to discover and ferret out toxicity.

“No matter how you think of it, as some political scientists theorised, disorder has been instrumentalised to the extent that elite groups deliberately create crises in order to feather their own nests, not giving a damn for the sufferings of the hapless majority.”

WAY FORWARD

Expectation is rife among stakeholders that a huge refinery, like the upcoming Dangote Refinery and Petrochemicals Company, alongside refurbished refineries in Port Harcourt, Warri and Kaduna undergoing turnaround maintenance and the modular refineries operating in Edo, Imo and Rivers States will, hopefully, turn things around.

“They will take care of local consumption. Costs like freighting and insurance associated with importation will be taken care of. Additionally, since we will not import again, there will be no talk of exchange rate determining our products,” said Mr Victor Ononokpono, erstwhile Treasurer of National Union of Petroleum and Natural Gas Workers, NUPENG.

Until then, Nigerians may continue to endure avoidable pain and suffering, which is often the product of an appalling disregard for due process and accountability in the country.