The Multi-billion Naira Fuel Bazaar

The Verdict By Olusegun Adeniyi; Email: olusegun.adeniyi@thisdaylive.com

Apparently in a bid to stem the persistent scarcity of PMS, especially in Abuja where the product is still being sold at the official price of N87 per litre, (even if it would take hours and sometimes days to get) the Pipelines and Products Marketing Company (PPMC) on Tuesday announced that it had revoked the licences of three marketers allegedly involved in product diversion. But whatever the justification for the move, it is not likely going to make any difference because the incentive for diversion is high and so is the reward.

It is interesting that while the federal government still pays subsidy to marketers, the pump price of PMS has been “deregulated” in most towns and cities across the country with vehicle owners paying between N100 to N140 per litre. What that means in effect is that fuel marketers are eating their cakes and still having them back. They collect subsidy from government (at the rate of N1.5 billion per day, from my findings) and they still make a kill at the pump by selling fuel at outrageous prices. That is why they divert the products from the cities to the hinterland where there are no checks and with that they create the fuel queues and the artificial scarcity that is likely going to be with us for a long time.

Whatever the stories being peddled to the public by some associations within the downstream sector of the petroleum industry, practically all the marketers are gaming the system because it is very lucrative to do so. According to industry sources, no fewer than 79 companies, including NNPC Retail, major marketers and IPMAN members were involved in diverting PMS meant for Suleja Depot between January and June this year. And if we compute the figures involved, we are talking about several billions of Naira practically being extorted from the people outside the normal gains already made by these fat cats.

Available reports from Suleja Depot reveal that within the first half of this year, NNPC Retail Limited diverted 92 trucks; Forte Oil, 39 trucks; ConOil PLC, 12 trucks; OANDO PLC, 3 trucks; Total PLC, 11 trucks; MRS Oil Nig Plc, 10 trucks; Mobil Nig Ltd, 5 trucks; NIPCO Nig Ltd, 8 trucks; A. A. Butu & Sons, 17 trucks; Jismah Invest, 7 trucks; Bisfarm, 7 trucks; Lofas Invest, 3 trucks; M. Tila, 4 trucks; Madagali Oil, 5 trucks; Favour Oil and Gas, 2 trucks; Rasgoke, 2 trucks; Tally Oil, 2 trucks Matrix Eng, 3 trucks; Yuhassib Nig, 2 trucks; Dajitim, 2 trucks; Sulaiya Oil, 7 trucks; A.U Mulagunwa, 2 trucks; Shadeen Nig, 2 trucks; Isigwe Uzoaga, 2 trucks; A.B.K Umar Oil, 2 trucks; Abdulkarim Arah, 6 trucks; ALCO, 2 trucks; LAWPAC, 2 trucks; S. Lamba, 4 trucks; Isa Gaya, 3 trucks; Gredab, 4 trucks; Kyabiz, 2 trucks; Mafolak, 8 trucks; Maraya Madugu, 6 trucks; Sri Lambo, 3 trucks; Paktan, 2 trucks; ASKA, 2 trucks and Jerry Paul, 2 trucks.

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he other marketers that diverted one truck each included Alafam Nig. Ltd, A.Y.M Shafa, Asta Nig Ltd, Funo Alfa, Pasali, S.B.B Nig Ltd, SOOIL Invest, Suabco Pet., Toni Oil, Asgit, Tantano, Rich Oil, Mefra Pet., Ibro Invest, Jacob Oyerinde, Mohibra Invest, Musakmat, Awelewa, A.A. Gajaga, Isigwe Uzoaga, Micas Energy Ltd, Tinox, Tomf Invest, Ahjab, Manzani. Mapeco, Danmagani Pet., Nzamamadsare, Maiketh, Dafan, Alh. Mohman, NafjaM, Jonalor, Nababa, Samar, Gloxen, Chiebo, Savanah, Ademag, Murray Concept, Faustina Invest, Amazing, Mild, Nababa Agwa, Hasaf, Baymon, Bon-dap, Aliyu Awoniyi, Onubogu, ABJ Sonito, Akulu, Gilbrater, Lovers, Dapsey, De-First, Omotadowa, Odenigbo, S. Lamba, Zacobass, Addidas, Al-hura, Advance Netwrok. Auyakawa Pet., Mamu Oil, Hassfade Global, Progress Hammed Taiwo, Puhidat, Akbell Global and D.B.

Interestingly, the foregoing are just the documented cases as there are many more of such diversions of products that are not officially accounted for. Yet following a briefing from the Ministry of Petroleum Resources, the Nigerian National Petroleum Corporation (NNPC) and other agencies in the oil sector last week, President Muhammadu Buhari was quoted as having said he remains unconvinced about the need for the removal of subsidy. It is a statement that must have delighted those who have for decades fed fat on the misery of Nigerian people because at least 50 percent of the corruption in this country is related to the mismanagement of the downstream sector with subsidy accounting for most of it.

While I understand why the president may want to be circumspect about a potentially tricky issue as removal of subsidy, the fact remains that it is an issue he would have to deal with, especially if he must fight corruption and reform the oil and gas sector. As things stand today, there is no way he can do either of the two with the current regime of subsidy still in place and the president should not allow himself to be deceived into believing he can reform it. He cannot.

Meanwhile, it is also very clear that fuel scarcity is something that we must come to terms with because there is practically little or nothing that the NNPC and its affiliates can do to curb diversion of products under the current dispensation. How many marketers are they going to blacklist when almost all of them are gaming the system because it pays to do so?

I have sympathy for President Buhari because I am aware of the mess he has inherited in both the upstream and the downstream sectors but the easier one to deal with at the moment is that of the latter. In any case, it is also imperative for an administration that wants to fight corruption to begin to deal with anything that promotes rent-seeking behaviours. Anybody who has read my recent 859-page online book, “The Inside Story of the Fuel Subsidy Scam, 2012” http://bit.ly/1IehOtQ , will understand better the reason why the subsidy regime is antithetical to the promotion of transparency and good governance.

It is therefore my hope that President Buhari will, at some point, muster the requisite political will to do away with the subsidy regime. Such a bold decision is in our collective interest as a nation.

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The Road to Arochukwu
The moment the death of Mrs Lydia Okoronkwo was announced in Church last month, I made a resolve that I would attend her burial because the late senior official at the National Primary Healthcare Development Agency was a wonderful woman who impacted many people. But when, after our editorial board session last week Wednesday, I announced that I would be travelling to Arochukwu the next day, Dr. Okey Ikechukwu said: “Be prepared to travel on the worst road in the country. In fact, it is incomprehensible how some people call that treacherous stretch a road."

Because I know that Ikechukwu is a man who sometimes thrives on humorous mischief, I pretended as if I didn’t hear him. But to demonstrate that he was serious, he added: “Segun, I would like to hear your story when you return from Arochukwu but don’t say I didn’t warn you.”

With such declaration, it was with much apprehension that I began the journey by road from Owerri airport at about noon last Thursday. As it would happen, the two-hour drive to Ohafia in Abia State, through Umuahia, the state capital, was uneventful even though there were several potholes as you would imagine on any normal Nigerian road. I therefore kept wondering how Ikechukwu came about his description of the road. In fact, at some point, I began to suspect that, perhaps he got his geography of Abia State all wrong.

However, the moment we drove out of Ohafia in the direction of Arochukwu, the jigsaw fell into place. While I lack the words to describe what we experienced, I can say that it is indeed the worst road I have ever travelled in this country. Even our Pastors, Chinedu Ezekwesili and Eva Azodoh, could not disguise their shock about the state of the road to Arochukwu. At the end we spent more than two hours navigating a distance of just 34 kilometres!

For all the people who made the trip from our church, the only topic of discussion last Thursday night was the road. And I really felt sorry for Elder Okoronkwo because some of us had to leave Arochukwu the next morning before the commencement of the burial service for his beloved wife so that we would not miss our flight back to Abuja from Owerri, given the terrible road we had to travel on.

I still cannot understand the criminal neglect of the road to Arochukwu, a popular and historic town that one has heard so much about. To worsen matters, there were some screaming billboards along the way with the inscription, “Ochendo is working”! For the uninitiated, Ochendo is the political nickname of the former Abia Governor (now Senator) T.A Orji, who spent eight years in power in the state. It is almost as if Orji’s handlers were mocking Arochukwu people.

Incidentally, when I googled Arochukwu yesterday, what came out were reports on the Abia State Government website about how some contracts for the rehabilitation of the road had been awarded by then Governor Orji. This was in February last year. “The road has been like that even during the time of Obasanjo and I have consistently lamented on the road”, said Orji who, in joining issues with someone from Arochukwu holding him to account on the road, claimed to have spent over N400 million on its rehabilitation.

To be fair, one should not be too critical of the Abia State government because it is actually a federal road. Yet the more I dig into the story of the road, the more interesting insights I get about contracts that were awarded (in Abuja) and abandoned after mobilization had been paid or money collected (in Umuahia) for which little or no work was done. But it is a serious indictment on our country that several communities, and I am not talking about some rural villages here, would be cut off from civilization the way Arochukwu communities practically are.

The potentials of Arochukwu are all there for any visitor to see but the road to the town has become a metaphor for a nation with so much promise but whose riches have been squandered. I hope the current Abia State governor, Dr.Okezie Ikpeazu will collaborate with the federal authorities on how to rebuild that emblem of shame called road. The people of Arochukwu deserve better.