NIGERIA FUEL: AVOIDING THE AVAILABLE FOR THE AFORDABLE

NIGERIA FUEL: AVOIDING THE AVAILABLE FOR THE AFORDABLE

By Bala Ibrahim

There is an African Proverb that says: When the desirable is not available, the available becomes the desirable.

The fuel situation in Nigeria today has not only made this African proverb appropriate, but aptly suitable in our own circumstances. Also highlighted by the proverb, because of our dire situation is, the authority of the nouns, acceptability, accessibility, availability, and most importantly, affordability. People have been compelled to weigh options, in line with the capacity of their pockets, before approaching the fuelling stations to buy petrol. Because of high price, quality is immaterial. What matters most is, the ability to buy.

The former Minister of Transportation, who was also the former Governor of Rivers State, Chief Rotimi Amaechi, was on air lamenting over the rising cost of living in Nigeria, decrying the escalating price of fuel in particular. In an interview with the ABN TV, Amaechi stated that the economic situation has deteriorated to the extent that even high-profile Nigerians, himself inclusive, are finding it difficult to buy fuel. By implication, Amaechi is saying, even where the fuel is available, people are challenged by the problem of affordability.

Indeed available is something that you are able to get or do, even if you don’t have enough money, or enough time. But affordable is something that you have enough money for, or the time to spare on it. Now the fuel situation in Nigeria has brought a clash on the relevant places of these nouns, with respect to the comfort of the customer. People are now compelled to search and screen the display boards of fuelling stations, with a view to knowing whether their selling prices are in conformity with the word inexpensive, or even reasonable. The availability or abundance of the product is not the most important factor now. For the customer, who is pressed by the absence of enough resources, his major concern is affordability. It is reasonable price that would determine his access to the station, regardless of the availability of the fuel.

Since Monday, when the Nigeria National Petroleum Company Ltd (NNPCL), confirmed that it bought petrol from Dangote refinery at N898 per litre and has so far received 16.8 million litres of PMS, Nigerians, motorists in particular, entered a new chapter of unexplained anxiety. The anxiety was compounded by the speculations that there is going to be a price differential in many fuelling stations, depending on the source of purchase by the dealers or distributors. While some people were saying Dangote sold the PMS to the NNPCL at N760 per litre, other sources were quoting the company claiming to have bought the product at N1,300 per litre.

It took the announcement of the Corporate Communications Manager of the company, Olufemi Soneye, to calm some nerves, when he said, “We successfully loaded PMS at the Dangote Refinery today. The claim that we purchased it at N1,300 per litre or N760 is incorrect. For this initial loading, the price from the refinery was N898 per litre. The price is determined by market forces. Its a deregulated market. I can also confirm, in response to inquiries, that we will receive 16.8 million litres.”

Already, the hike in the fuel price has pitched the oil marketers against the NNPCL, with the Independent Petroleum Marketers Association of Nigeria (IPMAN), threatening a showdown over the price adjustment. Like the end users, they are not necessarily attracted by the availability but the affordability. In their latest announcement, IPMAN, through their National President, Abubakar Maigandi, are urging the NNPCL to sell petrol to its members at competitive rates, based on what is offered to it by the Dangote refinery. Yes, accessibility and acceptability would not be determined by availability, but by affordability. No one is bothered about quality or quantity, but simply, affordability.

The good news is that the Government has announced today, that it has granted permission to petroleum marketers to lift petrol directly from the Dangote refinery without going through the Nigerian NNPCL.
This was contained in a statement by the Minister of Finance and Chairman of the Naira-crude sale implementation committee, Wale Edun, who gave an update on the take-off of crude purchase and product sales in naira transactions.

“With this mechanism now in full operation, along with the commencement of local production, we are well-positioned to transition to a fully deregulated market for all petroleum products”- Wale Edun,

With this development, petroleum product marketers are now free to purchase PMS directly from local refineries without the NNPCL playing the role of an intermediary. That way, the marketers are encouraged to initiate direct purchases from refineries on mutually negotiated commercial terms, which will promote competition and improve market efficiency”. Competition would compel a price war, which in turn would stimulate the price to crash, and become readily affordable to the buyer.

But until then, buyers of fuel are busy avoiding the available for the affordable.

NIGERIA FUEL: AVOIDING THE AVAILABLE FOR THE AFORDABLE